- The a2 Milk Company (A2M) has dropped as much as 16 per cent this morning despite reporting a 47 per cent increase in profits from FY18
- Bloomberg’s consensus forecast was NZ$297 million, but the company brought in NZ$288 million
- a2 Milk has reached NZ$1.3 billion in total revenue
- a2’s Infant formula in China now has a 6.4 per cent market share
The a2 Milk Company (A2M) has dropped as much as 16 per cent this morning despite reporting a full-year net profit of NZ$288 million.
The profit result is up 47 per cent since last year, but an even bigger profit of NZ$297 million was expected, according to Bloomberg’s consensus forecast.
a2 Milk has reached NZ$1.3 billion in total revenue, making this financial year the first time the company has reached into the billions. This is a 41.1 per cent increase on last year.
CEO Jayne Hrdlicka is pleased with how the company went this financial year.
“The company delivered record financial and market share results for 2019. 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,” she said
The company’s Chinese segment business revenues jumped by almost 74 per cent this year to NZ$405.7, which a2 Milk attributed to market share gains and increased distribution in the world’s biggest infant formula market.
a2’s Infant formula in China now has a 6.4 per cent market share which is up from 4.8 per cent one year ago.
This year, the company focussed on getting to know its consumers and sale channels in the U.S. and China.
“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 U.S.,” Jayne said.
The U.S. business revenues rose to NZ$34.6 million, which is up 160.7 per cent. However, the company reported an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of NZ$44 million in the U.S.
The company attributed this loss to increased investment in distribution growth and brand awareness.
In light of this, U.S. milk revenues have more than doubled and distribution has expanded to 13,100 stores.
In Australia and New Zealand, business revenue was NZ$842.7 million, which is up 28.3 per cent, and the company recorded an EBITDA of NZ$388.2 million.
“The Australian fresh milk business continues to strengthen with 10.7 per cent revenue growth and a record 11.2 per cent market share,” Jayne said.
“a2 Milk was the fastest-growing major fresh milk brand in Australian supermarkets and remains the leading premium milk brand and the only brand ranged in all major Australian supermarkets,” she said.