Australian baby formula producer Bubs has reported more sales from some Chinese buyers even as it flagged fears the coronavirus outbreak will hamper supply.
Baby formula from Australia is a valued commodity in China, where the virus – which has killed close to 2700 people – is making the transporting and delivery of goods difficult.
Bubs, which on Wednesday reported a $7.5 million first half net loss, said some traders in China were buying more of its products since mid-February as they try to secure baby food supplies.
These customers are mainly buying from the corporate Daigou distribution channel in Australia.
But the company warned the virus impact is making delivering products to China challenging.
The virus outbreak is having adverse sales effects too.
Some retailers in Australia have reported fewer sales of Bubs products due to fewer Chinese tourists and students.
Sales of Bubs products in China grew 19 per cent for the six months to December 31. Direct sales to China account for 19 per cent of the group’s overall revenue.
Bubs said the overall loss reflected the business still being in a growth phase, which involved investing in product development and marketing.
The company had reported a net loss of $8.8 million for the same period last year. Revenue for the six months to December 31 jumped 39 per cent to $19.5 million.
By 1300 AEDT, Bubs shares were trading 0.69 per cent lower at 72 cents in a weak market.
BUBS HALF YEAR LOSS NARROWS
* Net loss $7.5 mln vs $8.8 million loss
* Revenue up 39pct to $$19.5 mln
* No dividend declared.