Vitamins producer Blackmores has reported a 46 per cent plunge in first half profit, and flagged trouble from the coronavirus.
The Sydney-based firm was plagued by law changes in China over the interim period, as well as packaging costs, which resulted in net profit of $18.2 million.
Blackmores earlier this month slashed its full-year profit guidance and said it was scrapping its interim dividend in a market update.
The company’s revenue was down five per cent to $303 million for the six months to December 31.
Revenue in Australia and New Zealand alone was down 20 per cent to $115 million.
China’s changes to e-commerce laws, aimed at reducing counterfeit goods, took a large toll on sales.
Blackmores also bought a manufacturing plant in Melbourne in October, and there were costs from changes to volumes and materials.
The plant will improve research and development.
The final $20 million payment for the site will be paid in the second half.
Blackmores also said on Tuesday the coronavirus threat and higher costs from manufacturing would have a material impact on its full-year result.
Full-year profit is expected to be between $17 million and $21 million.
Discussing the overall result, chief executive Alastair Symington said costs had increased at a greater pace and company structure had become complex.
Management is aiming to simplify its product line and operations.
Blackmores will start designing products for what it called “the modern career woman” in China.
It will also use its manufacturing and partnerships in Indonesia and India to help growth.
Shares in the business were down 2.14 per cent to $68.23 at 1049 AEDT amid a wider downturn.