Operating profit before tax for the year ended June was $3.17 million, compared with $9.11 million in the previous corresponding period.
Revenue was up from $200 million to $201 million, while the after-tax profit was $2.2 million, down from last year's record $6.6 million.
The result, as earlier signalled, was below directors' expectations and reflected unfavourable global market conditions, the company said.
A strong performance for the first three quarters was achieved and an interim dividend of 1.5c per share was paid to shareholders in May.
The fourth quarter saw a sharp decline in wool prices followed in July by "unprecedented" high volumes of wool on the market.
Those events, compounded by the high New Zealand dollar, impacted on the value of the company's stocks and work in progress. No final dividend would be paid this year.
Factors affecting the fall in prices included reduced consumer demand in Europe, particularly for floor coverings, due to the weak economy; a fall in demand from China's textile industry, due to a decline in domestic economic activity and as a flow-on of the recession in Europe; and a major decline in the consumption of carpet wool in Australasia.
The market outlook for wool depended largely on the performance of world markets and remained uncertain. However, the company remained positive despite the international downturn.
That confidence was evidenced by recent wool sales, where prices had shown a firming tendency which was welcomed.
Chairman Derek Kirke, of Wanaka, said the very dramatic fall in prices was probably as "fast and sharp" as he could ever remember and he believed the company had done "extremely well" to achieve its result.
The company was very disappointed prices wool growers were receiving had been "so savagely reduced" and it took farmers' emphasis away from wool "on to other things".
Consumers globally were, in general, struggling "to one degree or another" and the likes of floor coverings became a lower priority, Mr Kirke said.
Going back 25 or 30 years, in times like those being experienced now, the wool board would buy wool and "tuck it away" for when things came right. It cushioned the price, in times of world economic recessions, but that no longer happened.
It was a pity wool boards started intervening in prices. There was not that capacity to intervene in the market as previously, and that had exacerbated the problem, he said.
Mr Kirke also spoke of the lack of promotion within Australasia, saying that was something the whole industry needed to look at. Competitive fibres had been promoted aggressively.
While the future was quite uncertain, the company was "not highly pessimistic". Major improvements to its Kaputone wool scour at Belfast would mean the scour was operating at a high level of performance, he said.
The future of WSI has been under a cloud for some time after the Commerce Commission granted authorisation to Cavalier Wool Holdings in June last year to make an offer for WSI's woolscouring assets.
WSI later confirmed it was planning capital raising in its attempt to buy the 64% of the company owned by Plum Duff and Woolpak Holdings and under the control of a receiver.
When asked for an update, Mr Kirke said it was "extremely frustrating" WSI did not have an outcome.
"We hoped by now we would have had an outcome. We are still hopeful that it's not very far away."
The ongoing issue had been a distraction the company "could do without", he said.
