15 Feb 2017

A2 Milk first-half profit skyrockets on booming sales

9:28 am on 15 February 2017

The speciality infant formula and milk products company, a2 Milk, has nearly quadrupled its first half-profit on the back of booming sales in China and Australia.

 Infant formula on sale in China.

A2 Milk's products have been selling well in China and Australia. Photo: AFP

The company's net profit for the six months ended December was $39.4 million compared with $10m the year before.

Sales were nearly double what they were last year, with revenue up 84 percent to $256m dollars.

The managing director, Geoff Babidge, said growth in demand for its infant formula product in Australia and China, and branching out into products such as long life milk are driving earnings.

"The outstanding aspect of our half-year performance was the continuing growth in a2 Platinum infant formula in both Australia and China, through a multi-channel strategy involving a combination of local distribution, ecommerce and overseas shopping traders."

He said sales had also been improving in the United States and Britain, and more money would be invested in marketing to boost sales growth.

Mr Babidge said it was expected that infant formula sales in the second half would be lower than the first because there are fewer big retail events to leverage off, but sales would still be "materially higher" than last year.

He said the company will look at paying dividends at the end of the fiscal year in June.

A2 Milk's products are marketed as being more suitable for some dairy intolerant consumers because it does not contain the A1-protein. It is in the midst of a legal fight with an Australian company over competing health claims for their products.

It has been one of the best peforming stocks on the sharemarket, gaining nearly 21 percent so far this year.

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