Clover Corporation Limited Half-Year Financial Report 31 January 2024

Clover Corporation Limited (ASX: $CLV) has reported a loss after tax of $0.6 million for the half-year ended 31 January 2024, marking a decrease of 118% from the previous corresponding period. The company's revenue decreased by 39% to $27.3 million, primarily attributed to ongoing challenges in its infant formula segment. Despite this, Clover Corporation has diversified its revenue streams by expanding into non-infant formula products and supplying certain infant formula manufacturers who have managed to recover their volumes in mainland China.

Executive Commentary on Financial and Operational Highlights

Clover Corporation has faced challenges in its infant formula segment due to a declining global birth rate, a shift in Chinese manufacturing preferences, and intensified competition in a shrinking market. The company remains committed to diversifying its customer base and exploring new markets and products. Initiatives include advancing encapsulated Choline for dry mix applications, scaling up microencapsulated probiotics, progressing regulatory approvals for Premneo, and investing in facilities for fish oil sourcing to address the shortage of Anchovy oil. Management has also sought to reduce operating costs and inventory holdings in response to softer demand. Looking ahead, Clover anticipates FY2024 revenue to range between $60m to $70m, with a stronger second-half performance expected assuming current forecast demand and stable global conditions.

Summary of Half-Year Financial Report and Outlook

Clover Corporation Limited (ASX: $CLV) reported a 118% decrease in after-tax loss for the half-year ended 31 January 2024, primarily attributed to challenges in the infant formula segment. The company has diversified its revenue streams and remains committed to exploring new markets and products. Despite ongoing market challenges, Clover anticipates a revenue range of $60m to $70m for FY2024, with a stronger second-half performance expected assuming stable global conditions. The Board has decided not to declare an interim dividend, prioritizing the use of cash in supporting new product commercialization to add greater shareholder value over time. The company's balance sheet remains strong with cash at $8.1 million, and initiatives are in place to address the challenges in the infant formula market and explore new opportunities for growth.