A2 chief in line for $4.1m payday
Shares in market darling A2 Milk have dived, despite the company making a record after-tax profit of $287.7 million.
The shares stood at $15.30 at midday yesterday but by the afternoon had fallen to $14.56.
At one stage in the day it was New Zealand’s top company by market capitalisation but at $12.36 billion it was overtaken by Meridian Energy ($12.55b).
Hamilton Hindin Greene investment adviser Jeremy Sullivan said the profit, up 47 per cent on last year’s, had been a ‘‘pretty solid result’’ but missed the expected $297m figure.
Marketed as beneficial for people who ‘‘have trouble drinking regular milk’’, A2 has enjoyed strong sales and international growth. Total revenue was up 41 per cent to $1.3b.
It showed growth in all markets, increasing market share in China for its infant nutrition by 6.4 per cent, and more than doubling its United States milk revenue with an expansion to 13,100 stores.
‘‘This was enabled by strong revenue growth across our key product segments of liquid milk, infant nutrition and other nutritional milk products, and across each of our key regions,’’ chief executive Jayne Hrdlicka said. Hrdlicka, who last year controversially sold off $4.36m worth of her shares after only two months in the job, also experienced a profitable year.
She was paid A$2.08m ($2.19m) made up of a fixed remuneration payment of A$1.5m ($1.58m) and a ‘‘transition benefit’’ of A$586,666 ($620,037). However, she is also owed a ‘‘potential short-term incentive’’ payment of A$1.8m ($1.9m) for the year, which will be paid after the publication of the audited results. If she receives this, it takes her total pay to A$3.88m ($4.1m).
On top of her pay, Hrdlicka still has 151,108 shares vested in her, which if she sold them at current rates would be worth $2.54m.
‘‘Pleasingly, our results were underpinned by growing brand awareness, expanding product distribution and strengthening in-market execution in our two most important regions of greater China and the US,’’ she said.
Most cows produce a mix of A1 and A2 beta-casein proteins in their milk but some produce only A2 protein. Nutritionally, A2 milk is similar to standard milk in terms of protein, calcium, fats and vitamins.
A2 Milk’s sharemarket value is now about $12b, more than twice Fonterra’s value. Compared with Fonterra’s 22,000 employees, A2 has 128.