Marlborough brewer Moa Group's result for the six months ended September was, as expected, bathed in red ink as the company revamps its distribution model.
Revenue for the period was $1.44 million, with the cost of sales reported at $1.24 million.
The small gross profit turned into an operating loss before finance income and expenses of $3.24 million in the period.
The main costs were administration at nearly $1.7 million and sales and marketing at $761,000.
The company received $209,000 in finance income to help lower the before-tax loss to $3.04 million.
Operating cash flow was -$2.7 million and investing cash flow was -$781,000.
The cash and cash equivalents at the end of the period fell from $11.5 million to $8 million.
Despite the loss, the company remains in a strong financial position with more than $10 million of current assets, including stock on hand, and only $1.57 million of liabilities.
Chief executive Geoff Ross said the six-month result bore the brunt of the change in the distribution model, including the lack of performance triggering the change, and the need to buy back stock.
The previous New Zealand distributor arrangement ended on October 1 and Moa assumed responsibility for its own sales initiatives for the New Zealand market.
The October performance was ''particularly strong'' for New Zealand and a good order book into November supported the revised sales volume projections, he said.
As signalled, gross margin performance was low, resulting from too much emphasis on lower margin products, unrealised economies of scale and the effects of distribution transition.
The directors reaffirmed the guidance for the full-year to March 31 with an estimated loss before tax in the range of $5 million to $6 million.
Moa proposed to provide a further briefing to shareholders with new plans and a market update before Christmas, Mr Ross said.
Moa's shares dropped 4.4% to 65c in trading, the lowest since it listed last year in an initial public offering at a $1.25 sale price.
That values the company at $19.6 million.
