Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

A2 Milk revenue, profit pushes higher

A2 Milk revenue, profit pushes higher in first four months of FY18

By Rebecca Howard

Nov. 21 (BusinessDesk) - A2 Milk, which markets milk with a protein variant said to have health benefits, says both revenue and net profit jumped in the first four months of the current financial year as it continues to benefit from strong demand for its infant formula.

Revenue climbed 69 percent to $262.2 million in the four months ended Oct. 30 from the same four months a year earlier, while net profit more than doubled to $52.3 million, the company told shareholders at today's annual meeting in Auckland. Group earnings before interest, taxes, depreciation and amortization were $78.4 million, up 120.8 percent on the same four months a year earlier.

The shares rose 4.1 percent to $8.16 having soared 268 percent this year. The company is the best performing stock on the benchmark S&P/NZX 50 Index this year as it benefits from increased global demand for its infant formula. The niche milk marketer migrated to the NZX's main board in late 2012 and now has a market value of $5.96 billion.

The latest increase in group revenue reflects strong growth in nutritional products in Australia, New Zealand, and China as well as positive momentum in the US and UK, it said in presentation slides published on the NZX. In China, for example, it said distribution in China Mother Baby channel now exceeds 5,800 stores and further expansion remains a key focus. It reiterated that it has launched its a2 Platinum infant formula in Hong Kong with initial distribution from November. It also recently launched Australia fresh milk into Singapore, an initiative it said is "progressing well."

Regarding the China infant formula regulatory environment after China moved to tighten regulations for sales through online grey market channels, it said recent commentary from the China State Council suggests a further one-year extension to the grace period of China cross-border e-commerce policy to the end of December 2018.

In terms of the traditional import mode, it said the company will transition from the existing China label to the new registered product in market during the second half of the financial year now that Synlait Milk obtained China Food and Drug Administration registration in September for the importation of A2MC infant formula into China from Jan. 1.

In other markets, it reported "pleasing progress" in the rate of sale for fresh milk in the UK and continued growth in the distribution footprint. The company said it is continuing to access incremental opportunities in Europe and the Middle East.

In the US, it said it is now distributing to 3,600 stores across the country, growth of 600 stores in the four months to October 2017. It reiterated it is investigating "specific new product opportunities for this market." The full-year outlook assumes marketing expenditure in the second half of the year to support expansion, it said.

Overall, the company said it expects the marketing expense to be around $30 million more in the second half of the year versus the first, driven by the timing of planned spend in China and the US.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Government: Delivering Lower Card Fees To Business

Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses ... More>>

SEEK NZ Employment Report: April 2021

OVERVIEW OF APRIL 2021: STATE OF THE NATION: April, for the second consecutive month, saw the highest number of jobs ever advertised on seek.co.nz. Applications per job ad fell 9% month-on-month (m/m). SEEK job ads were up by 12% m/m. SEEK job ads were ... More>>

Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

Stats: Lower Job Security Linked To Lower Life Satisfaction

People who feel their employment is insecure are more likely than other employed people to rate their overall life satisfaction poorly, Stats NZ said today. New survey data from the March 2021 quarter shows that 26 percent of employed people who thought ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>