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Speciality milk company a2 Milk says it has delivered a strong first half in a challenging market, with continued improvement on its growth expectations.
Key numbers for the six months ended December compared with a year ago:
- Net profit $73.8m vs $59.6m
- Revenue $783.3m vs $660.5m
- Underlying profit $107.8m vs $97.6m
- Underlying profit to sales margin 13.8 percent vs 17.3 percent
The company said the first half met expectations with double digit revenue and earnings growth.
"We have focused on building a strong innovation pipeline with recent new product launches in all categories supporting growth," chief executive David Bortolussi said.
Infant milk formula (IMF) sales grew a total of 18 percent, which outperformed the overall market - which fell 12.5 percent, he said.
"We are continuing to invest behind our brand with an additional increase in marketing investment driving further gains in China brand health metrics and record market shares in China label channels," he said.
The company said registration of its Chinese-label brand was on track to be received in the second half of the current financial year.
Revenue growth of nearly 19 percent was helped by a 54 percent increase in sales to China and other parts of Asia to $471.6m, with underlying profit up 88 percent to $111.5m.
Sales to the United States increased 61 percent, but cost improvements still resulted in an underlying loss of $12.2m compared with $16.4m the year earlier.
There was also an 18 percent increase in sales of Mataura Valley Milk, which also resulted in an underlying loss of $13.4m, with expectations of delivering a profit in 2026.
Australia and New Zealand sales were down 25 percent, driving underlying profit down 36 percent to $62m.
The company expected full year revenue growth in the low double-digits, with the underlying profit margin to be similar to last year's 13.6 percent.