Monday, 18 February 2019


NXTUPDTE: ONL: ONL Q3 2018 Business Update

26 Jan 2018 16:04NZX
BUSINESS UPDATE for the period 1 October 2017 to 31 December 2017 - Quarter
3, 2018


AUCKLAND, New Zealand, 26 January 2018 - The Board of Oceania Natural (NXT:
ONL) announces the quarterly performance of the business to 31 December 2017,
compared to its Key Operating Milestone (KOM) targets.

Following a review by the ONL board in December 2017, an Interim Update was
released to the NZX on January 16 restating the Company''s KOMs and providing
comprehensive commentary on the reasons why the KOMs were updated.

The Board will continue to closely monitor the Company''s performance against
these new KOM targets and will advise the market at the appropriate time if
any changes or updates are required as set down in the NXT Market Rules.

Total Sales
Sales for the quarter were $398k, the bulk of which was generated from the
sale of water, followed by Noni Juice and other ONL products.

As from 1 December 2017, ONL has taken over operational control of a Kaiwaka
water bottling facility and plans to continue to grow the local "Water for
Everyone" brand acquired as part of the purchase. Through working closely
with the previous brand owners and team, growth in local sales together with
additional volumes through ONL export clients has the potential to reduce
production costs and make "Water for Everyone" more competitive locally and

New Zealand Sales
New Zealand sales totalled $308k for the quarter and total water sales
included the "Water for Everyone" sales as from 1 December 2017, the
effective date of operational ownership of the Kaiwaka water bottling
facility. Noni Juice continues to experience strong demand with sales of ONL
products being offered locally through online platforms. Manuka Honey sales
to local retail outlets is also continuing to grow, albeit off a low base.

Overseas Sales
Sales for the quarter were $90k and include direct channel and online sales.
During the quarter, the ONL Wuxi team worked with distributors to ensure the
Company is well placed for future water orders, particularly for the coming
Chinese summer which coincides with the New Zealand winter and a

traditionally quieter time for water sales. Establishing good water
distribution channels in China should lead to higher year-round capacity
utilisation at the Kaiwaka factory and lower production costs as referred to

Water sales % of total revenue
Water sales accounted for 56% of the total revenue for the quarter and in
line with the targeted KOM of 55% for the year.

Total Litres of Water Packed
There were 346,699 Total Litres of Water Packed during the quarter, including
water packed at the Company''s Kaiwaka facility effective from 1 December
2017, and water packed by other manufacturers and suppliers for ONL sales.

The interest in ONL products, particularly Noni Juice and water, continues to
build due to investment in both a physical presence in China and ownership of
the water bottling facility at Kaiwaka. ONL has been approached to consider
long term supply agreements for a number of its products and is currently
pursuing several opportunities. The market will be kept updated on
developments as required by the NXT Market Rules.

Performance against Key Operating Milestones:

Key Operating Milestone ("KOM") Q1 FY18 Q2 FY18 Q3 FY18 Full Year FY18

1 - Total Revenue (NZ$''000) $123 $210 $398 $1,350

2 - New Zealand Sales (NZ$''000) $72 $117 $308 $941

3 - Overseas Sales (NZ$''000) $51 $93 $90 $409

4 - Water Sales % of Total Revenue  10% 55% 56% 55.0%

5 - Total Litres of Water Packed 24,000 243,060 346,699 1,250,000

KOM Calculations

Total Revenue ($000)

ONL is a food and beverage company selling a range of products into the
domestic and export markets. With the acquisition of a water resource and
manufacturing facility in December 2017, the Company''s key focus now includes
a range of spring and mineral water products, Noni Juice and other products
including Manuka Honey.

ONL has key investments, relationships and existing distribution agreements
in place that will be used to drive its revenue growth through the sale of
water, Noni Juice and other products. ONL also continues to work on strategic
initiatives to increase both New Zealand and export revenues.

The revenue projections made in the KOMs are in New Zealand dollars and will
fluctuate depending on currency movements of the New Zealand dollar exchange
rate against the currencies where the products are sold, particularly the
Chinese Yuan.

New Zealand Sales ($000)
New Zealand revenues are expected to lift strongly, driven by:

o Retail sales of water product through existing leading retail outlets
in New Zealand;
o Online sales through various websites offering the water product
o Sales of water through New Zealand based local resellers;
o Increased sales of Noni Juice with greater focus as a result of
moving to a direct selling model;
o Sales of other products, including Manuka Honey.

ONL''s strategy is to increase its New Zealand sales and the range of products
offered by focusing on existing online and distribution channels as well as
developing new sales channels.

Overseas Sales ($000)

Overseas Sales represent all export sales from New Zealand to overseas
customers. All transfers to ONL''s overseas entities are not recorded as
sales, until they are on-sold to third-party customers in the respective

Numerous sales channels are used and are supported by marketing within China
managed by Oceania Natural Wuxi Limited. ONL continues to work with various
distributors in order to increase revenues in overseas markets, with the main
focus being on the Chinese market.

ONL is also developing sales channels in other overseas countries in addition
to China, including Japan, Singapore and South Korea for its Noni Juice
product. Recent sales have been well received and resulted in increased
orders for ongoing supply.

The forecast exchange rate used for sales targets in China has been converted
to NZD/CNY at 0.20:1.

"Water Sales%" of Total Revenue (New KOM

Expressed as a percentage of total sales, the Water Sales % of Total Revenue
represents the percentage of total revenue (both New Zealand and Overseas)
that the ONL group obtains from the sale of water products.
There is an existing sales channel for the water products into New Zealand
following the recently announced acquisition of the Water for Everyone brand.
ONL expects to grow water sales both locally and internationally while also
looking to enhance production processes to ensure products keep pace with
increasing demand and remain competitive in all markets.
Total Litres of Water Packed

Having secured a water processing facility, ONL is transitioning from a food
and beverage focused company that outsourced product to be sold under its own
brands, to expanding its business into a vertically integrated seller of its
own water products.

ONL water products are expected to grow as a percentage of overall sales and
the Total Litres of Water Packed is a key measure to ensure that the
manufacturing and bottling facility, combined with outside suppliers, are
able to support planned growth in sales.

Total Litres of Water Packed represents the total of all water packed at the
Company''s Kaiwaka facility for ONL sales and external brands, together with
total litres of water packed by other manufacturers and suppliers for ONL

This measure is non-financial and while it indicates the anticipated growth
in the litres of water packed in order to meet the revenue KOM targets, it is
also used to ensure that the average selling price per litre packed over the
product range is maintained within acceptable levels for the group.

Future Events:

Event Date
4th Quarter business Update Due 1 May 2018
Full Year Preliminary Result Due 31 May 2018
Annual KOM Targets FY19 Due 31 May 2018
Annual Report Due 30 June 2018


Authority for this announcement
Name of senior manager or director
authorised to make this announcement: Malcolm Lindeque
Contact phone number:    021 464 392
Contact email address:
Date of release:      26 January

Oceania Natural Limited''s shares can be traded on the NXT Market. Oceania
Natural Limited is required to disclose information under the NXT Market
Rules. Information about the NXT Market and Oceania Natural is available here or from the company''s website at

For media enquiries please contact:
Julie Landry, Connect PR, or 021 895 098.
End CA:00313482 For:ONL    Type:NXTUPDTE   Time:2018-01-26 16:04:29
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