Listed milk company A2 Corporation has posted a $3.5 million loss in the 15 months to June.
That compares with a $6.3 million loss in the year to March 2008.
Revenue for the company, which owns and commercialises the intellectual property associated with A2 milk, fell 44%, to $1.6 million.
Last year's revenue was boosted by the sale of a license agreement for $1.4 million.
The company says financial improvements have come from a restructure of the management team and improving the balance sheet.
It raised money to lower debt last year, and now has cash reserves of $7.2 million.
A2 says it has been focusing for the last six months on helping its Australian business to become profitable, with milk sales now up 60% to $A18 million.
A2 says it expects the growth to continue, with the 2010 budget expected to deliver increased volumes and profitability.
The company faced one-off charges during the year, relating to the restructuring of its New Zealand head office, and a payment to the Child Health Research Foundation to cancel a profit-share arrangement.