AoFrio Q3 revenue drops, profit margins rise

AoFrio Limited reported a 12.1% decrease in revenue for Q3 FY23 compared to the same period last year.

However, the gross margin increased to 32.0% and EBITDA improved to a $0.4m profit.

Operating expenses remained consistent with the previous year.

On a year-to-date basis, revenue was 8% lower than the previous year due to global economic uncertainty and supply chain issues.

Despite lower revenue, gross profit increased by 3.5% due to a higher gross margin from improved sales mix.

Cash at bank was $3.7m, and the company has made progress in reducing trade receivables and inventory.

The company expects a significant lift in Q4 FY23 revenue but below previous guidance.

FY23 revenue is projected to be around $65.0m, with EBITDA in the range of $1.0m to $1.5m.

The company may breach its interest coverage ratio covenant but expects to seek a waiver from the bank.

AoFrio is focused on cost control and new product development, including a proof-of-concept trial with a food service chain and discussions with a supermarket chain in Latin America.

The company is confident in delivering improved performance in FY24.