August 25, 2017 / 12:30 AM / 2 years ago

UPDATE 1-Bellamy's Australia swings to annual loss after China strategy came unstuck

(Adds context, revenue, share price, background on China registration process)

Aug 25 (Reuters) - Bellamy’s Australia Ltd on Friday reported an annual loss as it booked writedowns and restructuring costs as part of an 18-month turnaround plan.

The infant-formula maker posted a net loss of A$809,000($640,000) for the year ended June 2017, compared with a profit of A$38.3 million last year.

The result contrasts with New Zealand-based rival a2 Milk Co Ltd , which posted a record profit on Wednesday and is widely viewed as having made the right bets with its China strategy, placing informal “daigou” shopping agents at the centre of its distribution efforts.

Shares were flat in mid-morning trade in a slightly negative market. Its share price is roughly half that of the A$16 highs reached in late 2015.

The company’s strategy of selling direct to China has been hurt by a crackdown on online imports that led to new regulations requiring foreign vendors to register by 2018.

Bellamy’s told Reuters on Friday it did not expect to register before June 30, 2018.

The rules have prompted some makers of infant formula to dump their product in China as they gave up on registering, which in turn forced Bellamy’s to cut prices, issue a profit warning and replace its leadership in January.

The group reported full-year revenue of A$240.2 million, up about 3 percent from last year. Annual profit was hit by one off costs relating to a business restructure that included a A$27.5 million revised supply agreement with dairy company Fonterra . ($1 = 1.2665 Australian dollars) (Reporting By Anusha Ravindranath in Bengaluru; Editing by Tom Westbrook and Stephen Coates)

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