Thank you, moderator. I'd like to welcome everyone to the presentation of the half year results of Noumi Limited. It's a pleasure to be here with you today. I'd like to begin by acknowledging the traditional owners of the land on which we meet today. I would also like to pay my respects to elders past and present. The results will be presented today by myself and Josée Lemoine, who will go through the financial results of the company. We've already uploaded the presentation, and you can navigate to the slides as you choose. We will talk to each of the slides and refer to the page numbers as we progress. Slide three is the agenda for today's call. We'll focus on the call-outs from the H1 results and discuss the key elements of the company's evolution. Josée will present the financial performance for the half.
The future strategy of the company will be presented, followed by closing remarks by myself. After the closing remarks, we will be available for questions. Moving to slide five. As you are all aware, the period of 2021 was a volatile year. Noumi wasn't immune to the challenges the world experienced, particularly the impact of COVID. The demand for out-of-home and some export channels was negatively impacted, but with domestic retail channels showing increased sales during the lockdowns. Supply chain delays and costs have impacted the nimbleness of Noumi and also the cost into some of our export markets. The ability to pass on the cost to our customers has been dependent on our agreements. Raw material costs have seen price inflation with our procurement team managing these well at this stage with the contract that we have in place.
It is a key focus area with the team as we progress into the future. With the restrictions around travel, the operational turnaround at Shepparton has taken longer than planned. It is disappointing to see the Dairy Nutritionals business behind last year, although there are clear reasons for the decline in revenue, which Josee will go through shortly, and progress over the last number of months is seeing shifts in overall performance. This is a significant focus of myself and the team as the asset base we have at Shepparton is world-class. As announced last week, the U.S. litigation has been settled. This has created a one-off expenditure of AUD 50.7 million. This is an important milestone for the company, providing clarity and removing all restrictions on our growth plans for MILKLAB and nut-based beverages.
Plant-based sales grew 11% period on period, which is a pleasing result given the disruption we have seen. We've had a pleasing growth in exports, with sales up 13% and now representing 29% of total revenue. MILKLAB plant-based exports were up 64%. Global dairy pricing is strengthening, with farm gate competition also increasing. This is great news for the farming sector, and we have always been motivated to drive long-term sustainability in the farming sector. Global dairy supply is flat, with Australia flat to decline. Overall, however, there is underlying category growth. Moving to slide six. Net revenue, excluding traded milk, is down 7% to AUD 265 million, with an adjusted operating EBITDA of AUD 4.6 million for the half. Adjusted operating EBITDA margin was down to 1.7%.
Sales in dairy UHT were down 4% to 124 million liters as we moved the product portfolio away from loss-making formats such as the two-liter. Lactoferrin sales were down to eight tons due to the timing of orders, some specification changes with customers, and short-term production constraints. Pleasingly, plant-based sales rose 6% with sales of our brand leader, MILKLAB, up 19% to 24 million liters. Export sales have grown 8% to 62 million liters as we work towards a diversified portfolio. On slide seven, I'd like to talk to the strategic achievements made in the H1 . The Specialty Seafood business was sold, enabling us to focus on two growth drivers, Dairy and Nutritionals and plant-based beverages. As mentioned earlier, the resolution of the U.S. litigation is an important step as it removes the growth restrictions on MILKLAB and nut-based beverages.
As we focus on new trends in the plant-based space, we've been able to introduce new products into the retail channel, such as Australia's Own Barista, So Natural Barista, with further products coming early in the second half. Consumer Nutritionals has continued growth, particularly in Crankt, despite the COVID impacts on key channels such as gyms. As mentioned earlier, we have had delays in the operational turnaround at Shepparton as a result of COVID. With the relaxation of restrictions, we have worked through the operational excellence programs. It is early stages, but we are seeing improvements across the site. On slide eight, the strategy is on course despite the challenges the operating cash flow caused by COVID. There has been impacts on operations with the safety of our employees, suppliers, customers and stakeholders being a key focus.
In parts of the pandemic, lockdowns and restrictions meant one-third of our staff at Shepparton were impacted due to the close contact rules in Victoria. Supply chain delays at times have been significant, with the availability of trucks and drivers impacting the ability for deliveries to be made. As the market has highlighted recently, we are seeing inflation pressures on raw materials and supply chain. Moving to slide 10, you can see the highlights of our Reset, Transform, and Grow strategy. As presented at the full-year results last year, our reset is substantially complete. We're now operating in the transform phase with a focus on growth. The new product pipeline is a key area of focus as we look towards consumer trends. The focus is on products, channels, and geographies. Slide 11 is a slide that you have seen before.
We've added further progress to this slide, which I've spoken about this morning. The results are lower than planned, although we continue to see green shoots coming through on a regular basis. Through the transform slide on page 12, we highlight the key areas of focus of myself, the board, and my team. The focus is on building products in the channels that deliver margin back to the business. We are very focused as we do this sustainability, which is multifaceted. We already cover many of these areas, but there is further work required. We are mindful of the number of activities we are working on through this phase. The Dairy and Nutritionals business, as mentioned, is behind our and my expectations. This is a key focus of mine, and spending time with the team is important.
The growth in the leadership team at our sites is instrumental to the transformation which we are seeing take shape, especially at Shepparton. With the plant-based beverage business, we are deploying capital investment to improve efficiencies, grow the sales force, and develop new products. I'll now hand over to Josee to talk through the financial performance.
Thank you, Michael, and good morning, everybody. The financial performance of our business during the half year will highlight three key points. First, the financial performance was impacted by COVID-19 with challenging operating and business conditions. Second, statutory loss included significant one-off impairment of AUD 50.7 million related to the U.S. litigation settlement and related legal fees, which marks an important milestone in the turnaround of the company, providing clarity and growth pathways. Third, good progress made in the operational turnaround. However, Shepparton's performance requires more consistency and remains in focus. Let me take you through the overall performance of the continuing operations. Please turn to slide 14. The table shows a summary of the income statement and other key metrics. Before I walk you through the detailed financials, let me bring to your attention the following.
With the reset of the business, which included the disposal of the Cereals and Snacks and Specialty Seafood businesses, the financial performance is reported on a continuing operations basis, which means excluding Cereals and Snacks and seafood. The reporting requirements for the balance sheet and cash flows are different as required by the accounting standards. We're also focusing on the adjusted operating EBITDA, meaning that we have adjusted for non-trading and non-recurring items and shown as pre-AASB 16, which means Leases now expands below EBITDA by an increase in depreciation and finance costs in the statutory accounts. I will expand on the non-recurring items shortly.
The total revenue from continuing operations declined AUD 19.7 million or 6.9% to AUD 265.3 million, which is reflecting a AUD 15.5 million reduction in traded milk sales, a reduction of AUD 13.8 million from the removal of an unprofitable two-liter product line, and AUD 11.6 million lower Lactoferrin sales due to the timing of orders that is forecasted to occur into H2 . The business was materially impacted by COVID, resulting in supply constraints from the Shepparton plant, offsetting solid sales growth across both the plant-based beverages businesses and export channels.
Net losses after tax of AUD 65.8 million, reflecting the impact of the U.S. litigation settlement-related cost of AUD 50.7 million and the fair value expense adjustment of the convertible notes of AUD 10.9 million, together with operating challenges with disruptions from the pandemics. Adjusted EBITDA from continuing operations of AUD 4.6 million, down 79% on the prior half, benefited from a modest increase in out-of-home sales, set back by lower Lactoferrin sales and COVID-19 related issues. Adjusted EBITDA margin of 1.7% also reflects sales mix and disruptions delaying benefits from sales and marketing investments and transformation progress. Other key metrics, cash at bank of AUD 16.3 million plus AUD 45 million of undrawn facilities provide sufficient liquidity for day-to-day business operations. I'll expand on the balance sheet and the capital base in a moment.
Pro forma net equity of AUD 190.6 million when including convertible notes of AUD 239 million, which includes the impact of the convertible note if classed as equity. Let me take you through the impact of the significant items. Will you please turn to slide 15. H1 FY 2022 financial results include a number of non-recurring expenditure items related primarily to. As mentioned several times, U.S. litigation settlement related expense, convertible notes, fair value changes, gains on modification of a lease, impairment of bottling plant equipment. On this one, management are currently preparing a business case with corresponding cash flows. We expect the impairments on this equipment to reverse. Of the current non-recurring items, we expect some future costs in relation to litigation. Please turn to slide 16 to get a sense of the revenue composition.
The pie charts highlight the revenue composition relating to continuing operations, excluding Cereals and Snacks and Specialty Seafood. As you know, growth for an FMCG food business typically comes from three streams: products, channels, and geographies. These charts highlight strong overall revenue diversification for our continuing operations. A couple of notable points. On the segment side, we've actively grown the relative revenue from plant-based, which I will expand on shortly. In a regional context, we are continuing to drive our growth in export markets, particularly in Southeast Asia. In brand revenue, 55% is derived from our own products versus private label and contracts. This focus will help deliver positive margin. Please note that brands and private label typically cover both dairy and plant-based products. Let's turn to slide 17. We are seeing strong momentum in our plant-based performance.
We have increased revenue by 10.7% to AUD 83.2 million, with this business overcoming COVID impact on the out of home market to deliver growth across all channels and brands. We have driven strong growth in MILKLAB domestic sales, up by 32% and export sales by 64%, and we are now selling this brand in over 20 countries. We have driven adjusted operating EBITDA up by 2.3% to AUD 15.5 million and continue to further improve profitability as we improve operating leverage. Our market share and customer loyalty performance are continually building as consumers switch to plant-based products. We have successfully launched our oats products in retailers and out of home channels across MILKLAB and Australia's Own brands. Overall, a strong performance in the plant-based segment.
Let's move to slide 18 for an update on our Dairy and Nutritionals segment. As Michael mentioned, the period of 2021 was a volatile year, and Noumi wasn't immune to the challenges the world experienced, particularly the impact of COVID. Dairy and Nutritionals performance was behind last year, with revenue for the six months to December 31st, 2021 declining 13.2% to AUD 182 million, with the business specifically impacted by COVID. When excluded traded milk, revenue declined AUD 12.2 million or 6.5% on the prior corresponding period. This resulted in an adjusted operating EBITDA loss of AUD 6.9 million, a deterioration from profit EBITDA of AUD 8.5 million in the previous corresponding period.
Revenue in the six-month period was affected by the pandemic related lockdowns and restrictions, which eased at the end of the period before the outbreak of the Omicron wave later in the year. Let me unpack the revenue movements on the prior corresponding half. Sales of Lactoferrin fell in the period due to the phasing of customer orders to the second half of FY 2022, driven by change in overseas specification requirements and the impact of lockdowns in markets such as Europe. Sales in the retail channel were down 12% compared to the same period in FY 2021. Following the deletion of unprofitable SKUs, margins have improved. Traded surplus milk sales were down AUD 15.5 million or 68% in the half, in line with the company's improved milk buying performance. Sales of bulk cream were impacted by slightly lower volumes and price.
While private label sales declined 7% in the period, contract sales rose 61%. Sales of Consumer Nutritionals, which include Vitalstrength, uProtein and Crankt, continued to improve despite the impact of COVID-19 lockdowns on gyms and fitness channels. Sales of Crankt protein shakes and bars rose 13%. This was partly offset by 27% growth in the out of home channel and 6%-16% growth in export, with sales to China up 26% and Southeast Asia up 11%. Finally, MILKLAB Dairy continued its strong sales momentum with sales up 24% in the period. During the period, the company faced cost pressures relating to or caused by COVID-19, namely rising domestic and international transport costs, supply chain delays, and increases in raw material pricing.
Contract milk pricing from farmers continued to rise, which has placed pressure on margin and will continue until the sales contracts are renegotiated. In addition, the pandemic created issues with workforce availability that adversely affected productivity and costs. Related outbreaks in regional Victoria and isolation rules particularly affected the company's Shepparton operations during the half, reducing productivity and slowing the implementation of some operational improvement initiatives. The transformation and operational turnaround strategy in Dairy and Nutritionals is focused on a number of areas, including reducing wastage, production efficiencies, removing or reducing unprofitable products, optimizing milk supply, and curtailing losses from the sale of surplus milk as experienced in previous periods. The asset base we have in Shepparton is world-class, and with the relaxation of restriction, we kicked off an operational excellence program. It is early stage, but we are seeing improvements.
Please turn to slide 19 for a sense of our balance sheet and capital management. As underpinned by Michael's comments earlier, 2021 has been a defining year for Noumi. The company has undergone a major reset and is firmly in the transform phase. The changes enable the company to recapitalize itself with the convertible notes issued in May 2021 and our amended senior debt facilities, providing financial stability and time to enable the company to execute its operational turnaround, transform the business, and to pursue focused growth opportunities. The company has sufficient liquidity via its working capital facilities and cash at bank to run the business on a day-to-day business basis. As of June 30th, 2021, the company had AUD 335.4 million of borrowings and AUD 37.5 million drawn in off-balance sheet facilities.
The pro forma net assets are AUD 190.6 million when including the convertible notes of AUD 239.5 million as equity. Net assets have been unfavorably impacted by the convertible notes, which, under the Australian accounting standard, are treated as a hybrid instrument due to their conversion feature. This means they are classified as a long-term liability and accounted for at fair value in the balance sheet, with any change in fair value reflected in the profit and loss and other comprehensive income. In the first half, the increase in the company's share price between June 30th, 2021 and balance date, together with the review of our credit spread, has resulted in a net drop in the carrying value of the note of AUD 11.5 million.
Two other key points on the balance sheet, the impending sale of the investment in AFMH, together with the renegotiating of one property lease, reduced the long-term assets balance from the prior period. The increase in liabilities is a result of the resolution of the U.S. litigation to be funded via the issue of additional convertible notes and the sale of AFMH. The company does not carry any intangible asset values for company-created brands such as MILKLAB. Only brands purchased may be carried as an asset in intangibles. Finally, on slide 20, cash flow from continuing operations before financing and non-recurring adjustments were AUD 4.9 million, reflecting COVID impacts, investment in brands and workforce, and phasing of Lactoferrin sales to the H2.
The plant-based business delivered strong operating cash flows, slightly offset by investment in brands and sales workforce, together with resetting payments to suppliers within trading terms. The Dairy and Nutritionals segment, although improving half on half, had negative cash flows. Cash inflows were impacted by lower Lactoferrin sales, investment in inventory of critical spares, together with manufacturing performance challenges as a result of COVID delays in the transformation initiative. The turnaround to positive cash flow is management and the board's number one priority. Debt days increased from 55 days to 56 days as a result of shipment delays, causing customers to receive stocks late and impacting payment timing. Trade and other payables decreased by 9%, reflecting the significant effort that has gone into improving purchasing controls and ensuring suppliers are paid on time. Inventories remain steady.
Cash flow from investing is lower by AUD 1.6 million, following a reduction in capital expenditure during the half. Group cash and cash equivalents decreased by AUD 8 million to AUD 16.3 million, affected by the pandemic's impact on sales and related costs. The group has AUD 45 million of available working capital facilities to provide sufficient liquidity to fund the business on a day-to-day basis. I will now hand back to Michael, who will provide an update on our strategy.
Thanks, Josee. I'm now talking to slide 22, where I'll talk a little further about the strategy in plant-based beverages. As discussed earlier, we are focused on innovation and product development as consumers' preference for healthier lifestyles continues to drive demand for plant-based beverages. With MILKLAB, in particular, we are in a prime position to benefit from these trends. Growth into Southeast Asia is an opportunity that we are especially focused on, and we will continue to build on current customer base and also build new relationships. With the easing lockdowns on the East Coast, the field team are energized to engage with consumers and drive awareness of our key products, particularly MILKLAB. With the disciplined CapEx programs, we are increasing capacity through improved utilization and optimization. The team has been very focused on supply chain efficiencies to streamline distribution to our customer base.
Slide 23 covers the strategy for Dairy and Nutritionals, with a key focus on operational efficiency programs to drive profitability. Through this work, we have a continued focus on improving yields but also working on rationalization of product lines to focus on margin-accretive products and reset or remove any loss-making lines. We continue to build longer-term arrangements with our farmers to provide security and investment capability. Noumi's was one of the earlier companies to offer these, and these suit both our farmers and us. With the increase in global commodities, we are seeing strengthening of the milk price. Although in Australia there has been a decline in milk production as farmers either exit the industry or move into other forms such as beef production, which is experiencing a surge in profitability. Australia is well known for its quality products and we continue to focus on quality.
We are working closely with our customers to manage the current supply chain disruption that has reappeared with the Omicron variant. Waste improvements are key to the overall efficiency improvements, and there have been gains made in this area as we utilize our world-class facilities. Moving into the closing remarks on slide 25, I wanted to highlight some of the progress that we are seeing. I've spoken to most of these during the call, but it is important to note that we have been delayed on some of our transformational programs as a result of COVID, but we are getting this back on track. We are investing in our brands and building our innovation pipeline. We continue to work on innovating our current product mix to ensure that they fit our current and future customers' tastes.
Export continues to be a focus and we are seeing export growth with a key focus on reducing debtor days caused by delays in shipping. The outlook on slide 26 highlights some of the lingering impacts that we are seeing with the Omicron strain, especially within the out of home. Any impact on sales volume puts pressure on margins. There are continued cost pressures on the business through inflation and the timing delays for us to recognize these inflation costs is being closely managed.
The geopolitical issues, including the current issues in Europe, is also being closely monitored for impacts on raw material pricing and any other flow on impacts from potential sanctions. The team is very focused on the core areas of the company and with the reset substantially complete and the US litigation behind us, the company is in a great position to move forward. I'll now hand back to the moderator for any questions for Josee and myself.
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Thank you very much for joining today, joining the call today. Appreciate you spending the time to listen to the presentation. Thank you.