ECO Animal Health Group PLC said on Wednesday its half year profit multiplied as a significant foreign exchange gain offset a fall in revenue, particularly in China.

The Surry-based animal health pharmaceutical company said its pretax profit in the six months that ended September 30 increased to £3 million from £472,000, despite revenue falling 9.4% to £34.9 million from £38.5 million.

The profit hike despite falling revenue was the result of significant foreign exchange gains of £2.6 million from £274,000.

ECO Animal Health said China and Japan sales fell by 46% to £8.5 million from £15.7 million, while aggregate non-China and Japan sales increased by 16% to £26.4 million from £22.8 million.

The significant decline in China swine sales in particular was due to the continued impact of Covid-19 restrictions. However, it predicted a sales recovery during the second half of financial 2023 due to seasonally occurring diseases, noting improved trading conditions in its October revenue.

It said remains cautious on its China revenue recovery due to China’s zero Covid policy, although it noted that this should improve in January, when there is normally strong pork demand associated with Chinese New Year and national holidays.

ECO Animal Health declared no dividend to its shareholders in order to focus on new product development initiatives, such as for its first two Mycoplasma poultry vaccines. This is despite its multiplying pretax profit.

‘We are on track for submission of our new Mycoplasma poultry vaccines at the end of 2023 and we expect marketing approval to be received shortly afterwards,’ said Non-Executive Chairman Dr Andrew Jones.

Shares in ECO Animal Health fell by 1.2% to 85.00 pence in London on Wednesday morning.

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