Infant formula producer Bubs Australia (BUB) has tabled $22.2 million in revenue for H1 FY21, down 23 per cent over the prior corresponding period (pcp).
The company also recorded statutory earnings before interest, taxes, depreciation and amortisation loss of $14.4 million.
Bubs credits these losses to significant disruption in its diagou channel and COVID-19 impacts, which resulted in the need to sell excess powder.
“The external forces brought on by the COVID-19 pandemic led to extensive channel disruption and supply and demand volatility across our sector in 2020,” Founder and CEO Kristy Carr said.
“While not immune to these factors, Bubs’ strong foundations, organisational agility and resilient business model delivered solid turnaround momentum with quarter-on-quarter sales growth following the major COVID-19 driven disruption to the diagou channel,” she added.
Sales across Woolworths, Coles and Chemist Warehouse stores were 55 per cent over H1 FY20, confirming Bubs as a fast-growing infant formula manufacturer.
As a result, Bubs is now the top goat formula brand in Chemist Warehouse and number two at both Woolworths and Coles.
Additionally, Chinese demand for Bubs’ infant goat formula remains strong with gross revenue up 36 per cent over the pcp.
“While this strong performance demonstrates Chinese consumer demand for Bubs premium products remains strong, the increase was not sufficient to outweigh the 57 per cent decline in gross revenue from the diagou channel in H1 FY21 compared to the prior year,” Kristy said.
Export gross revenue outside of China grew 44 per cent with sales momentum expected to continue across Bubs’ new Southeast Asian markets.
Due to the ongoing COVID-19 pandemic, Bubs has chosen not to detail any financial outlook.
Meanwhile, the company is continuing to grow its footprint in additional markets.
“We are confident we are well placed with strong foundations, brand share growth and a robust balance sheet to go forward with a sustainable and profitable expansion strategy to emerge as a lead challenger brand once the crisis subsides and market dynamics stabilise,” Executive Chairman Dennis Lin concluded.
Bubs is up 2.73 per cent on the market this morning (FEB26) with shares trading at 56.5 cents at 10:54 am AEDT. (Source: themarketherald.com)