The A2 Milk Company boosted sales by 32.8 per cent last year, with profit up a similar amount as the Covid-19 crisis boosted demand for its products in core markets.
The performance was driven by continued growth in its infant nutrition business with sales totalling NZ$1.42 billion for the period, accounting for the vast majority of its overall $1.73 billion turnover and an improvement of 33.8 per cent on the previous year.
Sales of Chinese-labelled infant nutrition products was significant, with sales effectively doubling to $337.7 million, the company said in an earnings statement. English-labelled product sales rose by 21.2 per cent.
“Our performance was robust throughout the year and we demonstrated significant resilience in the second half managing the business in the face of the Covid-19 global pandemic,” said CEO Geoffrey Babidge in a report to shareholders.
“Through these unprecedented times, we have been fortunate to continue experiencing strengthening levels of consumer demand and worked closely with our strategic partners and customers to ensure supply chains remained open and consumer needs continued to be met.”
Much of the growth occurred in the third quarter when sales exceeded expectations due to pantry stocking by consumers, in the wake of lockdowns and social-distancing requirements.
“In our view, a proportion of consumer pantry stocking driven by Covid-19 unwound in the fourth quarter. However, this will remain a dynamic situation and we will continue to monitor changes in consumer behaviour moving forward,” said Babidge.
Meanwhile, the company’s liquid-milk business in Australia and the US grew by 29.7 per cent to $222 million. US sales almost doubled thanks to the milk now being sold in more than 20,000 retail stores, while Australian sales were by 14 per cent.
The A2 Milk Company achieved a net profit after tax of $385.8 million, up 34.1 per cent.