Biotechnology company Botry Zen has reported a $1.7 million loss for the year to March 31.
The result, which surpassed last year's $1.2 million loss, was attributed to production problems in the first half of the year, costs associated with a failed convertible rights issue and the absence of grant funding.
Chairman Stephen Higgs said while the bottom line result was "a major disappointment", there was some positive news.
Sales of its two biological controls for grape fungi botrytis, botry-zen and armour-zen, were improving, with sales of botry-zen 71% ahead of the previous year, and sales of the late-season acting armour-zen, in only its second year of production, encouraging.
Mr Higgs said the company's performance in the second half of the year was much stronger than for the comparable period a year earlier.
Sales in the period were up 68% and gross margins were up at 43%, compared to negative 30% in the previous year.
Savings made on costs and inventory levels at year-end indicated production problems had been addressed.
It has been a difficult year for the Dunedin biotechnology company, with formulation issues last winter disrupting production of armour-zen, followed by finance problems when shareholders rejected a $1.3 million rights issue.
The Bank of New Zealand subsequently agreed to new overdraft facilities and two new cornerstone shareholders injected extra finance.
In the year under review, trading revenue was $586,000 compared to $342,000 but the cost of sales rose from $512,000 in 2008 to $617,000 in the year under review.
Other key changes were distribution expenses at $58,000 ($94,800), marketing $123,000 ($550) finance costs $435,500 ($63,000) and administrative costs $458,000 ($569,000).
Looking ahead, Mr Higgs said the company would focus on production consistency, improving production volumes and increasing domestic sales.
It hoped to also secure United States registration and develop and maintain relationships in Europe.
Botry Zen shares were unchanged on Friday at 2.5c.
