April 16, 2018 / 3:02 AM / 3 months ago

UPDATE 1-NZ honey maker Comvita in takeover talks, slashes FY forecast

(Adds details on ownership, CEO quote, shares)

April 16 (Reuters) - New Zealand honey maker Comvita Ltd said on Monday it is in talks with an unnamed party about a possible takeover, as it slashed its full-year profit forecast after bad weather and poor yields affected its crop.

Comvita, whose top shareholder is China Resources Ng Fung Ltd, said it has signed a confidentiality agreement with a possible buyer, which has been conducting due diligence for the past several months.

It expects to further update the market by mid-May 2018.

Despite the takeover interest, Comvita shares slipped more than 3 percent to an eight-month low as it downgraded its profit expectations by about 45 percent due to the poor weather.

The company said it expects full-year net operating earnings of NZ$8 million to NZ$11 million ($5.9 million to $8.1 million), well below an earlier estimate of more than NZ$17.1 million.

“We have now completed 80 percent of the extraction for the season and tested 50 percent of our honey,” said Chief Executive Scott Coulter.

“The yields are well below expectations, around half of what we originally budgeted.”

China Resources Ng Fung holds about 10.1 percent of Comvita, according to the latest data from Thomson Reuters Eikon.

The Chinese firm has strategic interests in several New Zealand and Australian agribusiness companies, including horticulture company Scales Corp, dairy company Murray Goulburn and New Zealand King Salmon.

In the year to Friday’s close, Comvita had shed 16.1 percent against the New Zealand benchmark’s gain of 0.2 percent.

$1 = 1.3611 New Zealand dollars Reporting by Aaron Saldanha & Susan Mathew in Bengaluru; editing by Richard Pullin

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