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a2 Milk profits soar by 65 per cent

a2 Milk productsThe A2 Milk Company has reported a “strong start” to FY19 with a 64.5 per cent lift in net profit for the first four months of the year.

The New Zealand-based dairy giant recorded a net profit of $NZ86 million ($80.62 million) while revenues rose 40.5 per cent to $NZ368.4 million.

The company expects strong revenue growth to continue but at a slightly more moderate rate than in the first four months.

Jayne Hrdlicka who took the reins as CEO in July said in a statement on Tuesday that the “growth and evolution” of the company is “impressive any way you want to look at it”.

The fresh milk business has increased its share of the Australian fresh milk market, with a record 10 per cent share. And while the company’s expansion into China and the US is set to increase marketing costs, continued growth of its A2 Platinum infant formula, is fuelling a positive outlook.

“We have a strong brand, special culture and unique proposition, the combination of which positions us very well for the future,” Hrdlicka said.

“We are not concerned about the current regulatory dynamic in China and elsewhere in the world.”

Hrdlicka said A2 and its daigou network had long been anticipating changes to China’s domestic and cross-border e-commerce rules, and both were “well prepared” for the new regime.

She pinpointed the growing middle class in Asia and China as key to the company’s growth.

Infant formula sales remained strong in China across all channels, with distribution increased to 2000 more stores. The company tripled its 11/11 sales performance and a2 Platinum ranked 2nd overall in CBEC infant formula sales across four major platforms.

US distribution increased from 6000 to 9000 stores with sales velocities continuing to build.

Read Inside FMCG‘s interview with a2 Milk CEO Jayne Hrdlicka in the latest issue of our magazine.

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