Australian Wool Innovation is taking steps to counter a decline in revenue attributed to low wool prices and a reduced levy income after recording its second straight year of drawing down on reserves to the amount of $16.8 million. In 2022 AWI drew $10m from its reserves, but going forward AWI chairman Jock Laurie indicated at the company’s Annual General Meeting held in Sydney on November 17, that wouldn’t be happening in the new financial year. Mr Laurie said in the Annual Report 2022-23 Chairman’s Report that since the wool levy was reduced from two per cent to 1.5 per cent in 2021, the company’s once healthy financial reserves have fallen by about a third. “The reserves are now at their lowest level for about a decade (at $83.8 million),” he said. “AWI’s expenditure has exceeded its revenue for the past four years, in 2022/23 by nearly $17 million, and expenditure is again forecast to exceed revenue in the current 2023/24 year by more than $10 million. “We realise that this level of expenditure cannot go on — during the next couple of years, we will have to make tough decisions to cut expenditure in some key projects.” AWI chief executive John Roberts reported at the AGM that since the COVID pandemic, the company had faced expenditure costs above the contributed income and was trying to manoeuvre itself into a better financial position. Those steps included “downsizing as a company” from 240 employees to 150, and “pulling back on a number of projects”. “In 2023-24 we have limited reserves and no or limited drawdown in funds. “Revenue has been reducing significantly as we share the low prices of wool with woolgrowers.” Mr Roberts said wool values belonged at a “much higher” level than it was selling for, despite the increase in recent weeks to 1150c/kg on the Eastern Market Indicator. “We are confident in the work we have done in repositioning wool in the market,” he said as he anticipated the consumer sentiment would “turn around” in the future. Mr Roberts said the challenging nature of the company’s finances had forced AWI to “re-focus and fine tune our targets and activities even further”. “This has meant a number of projects have had to be discontinued as we re-deploy funds to the areas where the business and the board see being most pressing,” he said. Even though there had been significant cut backs made by AWI, representatives had still attended 22 trade shows around the world last year, some of which were dedicated to first responders and military, in which AWI was able to encourage the use of wool as the perfect fibre to meet their uniform needs. He said new markets in Bangladesh and Portugal were also “showing good promise”.