A2 Milk enjoys profit boost as formula sales surge
A2 Milk, which markets milk with a protein variant said to have health benefits, nearly quadrupled its firsthalf profit as demand for its A2 Platinum infant formula surged in its key Australian, New Zealand and Chinese businesses.
Net income soared to $39.4 million in the six months ended December 31, 2016, from $10.1m in the same period a year earlier, the Auckland company said yesterday. Shares closed down 1c at $2.56. Revenue rose 84 per cent to $256.1m — ahead of the $230.7m forecast by brokerage Forsyth Barr.
A2 Milk posted strong growth in its Australian business, where it is gaining market share, with sales and earnings tracking ahead of its plan. In China, the company said increased understanding of its A2 products was helping to drive consumer demand, while results in its fledgling British and US markets also improved. The company expects to adopt a dividend policy after its 2017 full-year results.
“The half-year results show continued progress against the company’s objective of building a global brand,” said managing director Geoffrey Babidge.
While fresh milk and infant formula generate most of its current revenue and earnings, A2 said it was continuing to broaden its range and would launch additional nutritional products in the next 12 months.
In the Australian and New Zealand markets, earnings before interest, tax, depreciation and amortisation more than doubled to $70.4m from $34.5m a year earlier.
In its Chinese and other Asian markets, ebitda soared to $13.7m from $1.2m. British and US markets cut their loss to $7.7m from $8.1m.