Natural health and skincare company Comvita reported first half sales down about $3.5 million, affected by unfavourable exchange rates and a mild southern hemisphere winter.
The company today said it made sales of about $36.5m for the six months to the end of September, down from $40.1m a year earlier.
A net loss of about $2.2m for the six months was expected, compared to a profit of $1.6m for the same period in 2009.
Changes to tax laws for depreciation on buildings had resulted in a one-off, non-cash tax expense of $1.5m.
Also, a trial in the UK resulting from an infringement of one of Comvita's key wound care patents had cost $2m, the company said.
All legal costs had been paid in the half, with a ruling on the case expected late in October.
Adjusting for one off items, the first six months result would be a net profit of about $100,000, Comvita said.
While sales were down in NZ dollar terms, in local currency terms underlying year on year sales growth for Comvita was 14 percent.
Sales to the key Asian market of China had more than doubled over the same period last year while sales in Hong Kong had grown by about 12 percent, Comvita chief executive Brett Hewlett said.
In the UK the company was navigating a turnaround from last year and had secured important new listings with major retailers such as Waitrose, Sainsburys and Boots.
While the company was disappointed with its expected financial result for the first six months, it remained positive about the strategies it had in place for its key markets, Mr Hewlett said.
With a renewed focus on costs, the operating result for the second half of 2011 was expected to be similar to 2010.
Comvita's sales in the past 18 months had shown resilience to the general economic downturn, and it continued to pursue opportunities which would grow and strengthen the business, Mr Hewlett said.
Comvita shares were down 6c to $1.95 soon after the market opened today.