SYDNEY, Aug. 24 (Xinhua) -- Shares in Australian vitamin giant Blackmores Ltd have dived on Wednesday despite announcing a near doubling of its full year profit as it acknowledges challenges to exports in key Asian markets in the first quarter.
Blackmores Ltd sales increased 52 percent 717 million Australian dollars (545.18 million U.S. dollars) in the year ending June 30, doubling profit to 100 million Australian dollars (76.05 million U.S. dollars) on the back of strong Australian sales, supported by the Chinese tourist dollar seeking it's products in local stores.
"We estimate that Chinese consumers influence over 250 million Australian dollars (190.13 million U.S. dollars) of our Group sales through a combination of export sales, in-country sales and sales through Australian retailers," Blackmores chief Christine Holgate said in a statement on Wednesday.
Holgate however said the start to fiscal 2016-17 will be lower than last year as the domestic market has softened in recent weeks, while exporters are changing channels through which they acquire products.
Blackmores has been struggling since April from new Chinese import regulations, sending its share price tumbling 25 percent from just above 200 Australian dollars (152.11 U.S. dollars) following a strong surge from investors taking riskier bets to protect capital.
By 11:10 local time (AEST) on Wednesday, Blackmore's shares had slumped a further 17.86 Australian dollars (13.58 U.S. dollars), or 11.10 percent to 142.99 Australian dollars (108.75 U.S. dollars) on Holgate's update.
"A lot of people are really starting to question whether these price to earnings ratios are really going to be validated in the future, because it's requiring crazy growth in earnings over many years to validate where the stock price is trading at the moment," IG market analyst Angus Nicholson told Xinhua.
"It only really takes a minor disappointment to see the price tank."
Blackmore's Asia sales were up 54 percent to 129 million Australian dollars (98.12 million U.S. dollars) over year to June 30, with Chinese in-country sales making up 48 million Australian dollars (36.51 million U.S. dollars) through the expansion of free trade zones and bonded warehouses facilitating e-commerce purchases.
Holgate expects sales will improve as the year progresses, leveraging the strong social and demographic trends underpinning demand for natural health products.
"We are encouraged by strong consumer demand across our business and growing market share affirming our leadership in Australia and the strong momentum from Blackmores Asia and BioCeuticals."
"(We) will continue to develop our business model, building new growth channels, adapting our cost base and accelerating our transition to support the changing retail landscape to ensure our continued optimism for long-term growth."
