A2 shares rally after profit jump

AUCKLAND: A2 Milk’s share price rallied sharply yesterday after the company reported a 42% jump in annual net profit to $114.7 million, driven by strong growth in its infant formula business in China.

The company also said it intended to return capital through a $150 million onmarket share buyback. By midmorning, a2 Milk’s shares were up 34 cents, or 6.2%, at $5.81.

The company’s result showed revenue in the June year grew 19.8% to $1.44 billion.

Earnings before interest, tax, depreciation and amortisation (ebitda) rose 59.0% to $196.2 million.

Cash on hand

$816.5 million. came to

A2 said it faced a positive outlook for 2023 and expected high singledigit revenue growth and ebitda margin improvement.

Chief executive David Bortolussi said it was a successful year, the company returning to doubledigit growth in revenue and earnings despite significant headwinds.

‘‘We are pleased with the progress that has been made in stabilising the business, refreshing our strategy and improving our execution,’’ he said.

‘‘Our significant increase in marketing investment has driven further gains in brand health metrics and record market shares, delivering strong growth in our China infant milk formula business,’’ he said.

China label and English label infant formula sales were up 12.2% and 11.6%, respectively.

AustraliaNew Zealand and US liquid milk sales were up 1.8% and 30.2%, respectively.

The company remained committed to the unofficial daigou channel and had increased its direct engagement and marketing support, Mr Bortolussi said.

Jarden senior analyst Adrian Allbon said a2 Milk had shown strong ‘‘execution’’ of its strategy in a difficult macro environment. —