Strong sales and profit growth in China have propelled The a2 Milk Company to a near-$100 million net profit for the first half of the 2018 financial year, with the result surpassing its full year results in FY17.
The dairy producer and infant formula manufacturer unveiled its half year results to the ASX today, reporting a 70 per cent gain in total revenue to $434.7 million and a net profit of $98.5 million, a 150 per cent rise on the previous corresponding half year.
In China, the company’s revenue grew to 204 per cent to $114.4 million, with EBITDA up by 252 per cent to $48.3 million.
A2 infant formula is now distributed in around 6,700 Mother & Baby Stores in China, while a2 Platinum was the top-selling formula on Kaola.com, second-ranked on JD.com and third-ranked on Tmall during the 11.11 Global Shopping Festival (Singles’ Day).
Managing director Geoffrey Babidge said growth in a2 Milk’s distribution networks in China, as well as the United States, laid a strong foundation for further profit growth in FY18.
“An especially pleasing aspect of our performance was the continuing strong growth in market share and sales of a2 Platinum infant formula in China, along with our success in adapting to the evolving regulatory environment in that market,” Mr Babidge said.
“Continuing strong performance and the consequent strength of our financial position mean the company is very well positioned to continue to execute its growth strategy in both existing and targeted markets.”
The a2 Milk Company was one of the strongest performers on the ASX today, with its stock closing trade up 29 per cent at $11.30.