Profit falls, balance sheet good
AUCKLAND: A2 Milk said its net profit dropped by 35% to $120 million in the first half due to Covid19 disruption in the unofficial daigou trade into China, and the flowon impact of that on crossborder ecommerce channels.
At an operating level, a2 Milk’s ebitda dropped by 32.2% to $178.5 million. Revenue eased by 16% to $677.4 million, slightly better than its December guidance of $670 million.
A2 Milk’s ebitda margin came to 26.4%, a touch down on its guidance of 27%.
Looking ahead, a2 Milk said it expected its revenue to come in at the bottom of a previously advised $1.4 billion to $1.55 billion range for the year to June.
Its ebitda margin forecast for the year was pitched in a range of 24% to 26%, down from its previously advised range of 26% to 29%.
Inventory at the end of the six months came to $198.6 million, $51.2 million higher than at the end of 2020, and the consequence of managing the uncertainties and complexities of Covid19 and its impact on supply chains.
The alternative milk company, which has appointed David Bortolussi as its new chief executive to replace the outgoing Geoff Babidge, said it had been a challenging first half, as revenue fell by 16%.
Australian sales were up 16.3% to $86.9 million.
Focusing more on affordable premium pricing in the United States resulted in sales increasing 22.0%.
A2 Milk balance sheet remained strong with no debt and a closing cash position of $774.6 million.
The cash position was $79.5 million lower than June 2020 due to negative operating cash flow, participation in the recent Synlait capitalraising and the acquisition of the Kyvalley milk processing facility. — The New Zealand Herald