Join our daily newsletter At The Bell to receive exclusive market insights
- Health and wellness goods developer Jatenergy (JAT) is one of the rare companies that has reported growth during the COVID-19 pandemic
- In February, the company achieved its record monthly revenue of $8.5 million, while March was not too far behind on $8.1 million
- JAT said the revenue increase could be attributed to an uptake in lactoferrin sales in China, due to the COVID-19 outbreak
- This is also the fourth successive cash flow positive quarter for the company, where JAT generated roughly $1.65 million in net cash from operations
- The company netted approximately $18.5 million from customer receipts
- JAT is expecting revenue to be stable over the coming months, which is driven by increased lactoferrin product sales, new products and the ANMA manufacturing facility ramping up after installing new machines
- JAT remains steady on the market this morning, trading for 5 cents per share
Health and wellness goods developer Jatenergy (JAT) is one of the rare companies that has reported growth during the COVID-19 pandemic.
In February, the company achieved its record monthly revenue of $8.5 million, while March was not too far behind on $8.1 million. JAT said the revenue increase could be attributed to an uptake in lactoferrin sales in China, due to the COVID-19 outbreak.
This is also the fourth successive cash flow positive quarter for the company, where JAT generated roughly $1.65 million in net cash from operations. The company netted approximately $18.5 million from customer receipts.
JAT is expecting revenue to remain stable over the coming months, driven by increased lactoferrin product sales, the launch of new products and the ramp-up of its ANMA manufacturing facility after installing new machines.
Additionally, the company is expecting its first shipment of plant-based meat products to be shipped to China soon.
“We continue to see positive near-term growth drivers for our business, with demand stoked by global circumstances and our ability to deliver reinforced by the investments we have made over the past year,” Managing Director Wilton Yao said.
Lactoferrin sales
Since December, JAT has experienced an unexpected demand for its lactoferrin dairy products.
Sales for the Neurio lactoferrin brands in January 2020 reached $1.8 million, while January 2019 orders were just $294,000. Similarly, in February, JAT achieved $5.2 million in Neurio sales, compared to just $1,099,917 February 2019. Last month, $2.7 million netted from Neurio sales well and truly beat the $388,714 brought in over the previous corresponding period.
ANMA facility
In October 2019, JAT’s manufacturing subsidiary, ANMA, ordered new machinery so that the manufacturing facility could meet increasing demand.
The new machines give ANMA the capacity to deliver milk powder into different sized containers and could produce individually packed sachets in three different sizes.
In March, ANMA confirmed orders for more than 660,000 various lactoferrin and milk powder products. Additional orders are also expected to be received for delivery before June 2020.
Ultinature Nutritional Australia
During this quarter, ANMA signed a two-year manufacturing and supply agreement with Ultinature.
Ultinature is an Australian provider of premium quality nutritional supplement products to international markets.
Under the new agreement, Ultinature will place orders with ANMA for the manufacture of four specific Ultinature products as well as any new products which Ultinature may develop.
Research agreement with the University of Sydney
In March, the company teamed up with the University of Sydney to develop an antiviral food supplement.
The formula will aim to prevent common infectious diseases such as influenza, herpes simplex virus and norovirus. The food supplement will be based on lactoferrin.
The research is expected to be completed by April 2021 and aims to be on the Australian market by early 2022.
Plant-based Meat
In November, JAT established a joint venture with leading Australian based food manufacturer, Oppenheimer, to develop plant-based meat substitute products to be sold worldwide.
Under the agreement, Oppenheimer will undertake extensive research and development, while JAT will source the buyers in China.
The first batch of around 250 kilograms was ordered in March and is being manufactured in Australia. These products are expected to hit the Chinese restaurants by mid-May.
Ocker Products
In January, the company signed a three-year deal with Ocker Products. Ocker will purchase $80 million worth of dairy products from Jatenergy in the first year of the agreement and distribute them in China. JAT received the first order for Ocker in March, which totalled to US$1.5 million.
New Funding
This month, JAT arranged two facilities to raise $5 million. The funds from these will be used for capital expenditure and for working capital purposes.
This new funding puts JAT’s total cash balance at $10.5 million.
“The $5 million in new funding we recently secured will allow JAT to reach even higher turnover levels. It will empower us to increase raw material and inventory levels as well as acquire and install new machinery at our ANMA facility to develop and produce the new products which our customers are demanding,” Wilton said.
“We have developed the world’s first Lactoferrin with Camel Milk Powder and another new A2 protein Children’s Milk Powder, and look forward to bringing these to market,” he added.
JAT remains steady on the market this morning, trading for 5¢ per share at 11:42 am AEST.
