A2 Milk has more than tripled its first half net profit compared to the same period last year, driven by demand for its infant formula in China.
The company, which has also made moves into US and UK, reported net profit after tax (NPAT) of $NZ39.4 million ($36.8m) in the half to December, 290 per cent higher than the previous corresponding half.
Revenues for A2's Platinum infant formula product grew 62 per cent in Australia and 348 per cent in China compared to the same period last year.
“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, e-commerce and overseas shopping ('Daigou’) traders,” A2 Milk's managing director Geoffrey Babidge said.
"Whilst the growth in demand was evident across the half-year, there was a marked increase in infant formula sales in the second quarter corresponding with the phasing of key sales events in China and an increase in market share in both Australia and China.
"This was achieved whilst maintaining a prudent approach to the management of production and inventory in recognition of foreshadowed changes in regulations for infant formula sold in China," Babidge said.
The results are in contrast to the one-time share market darling, organic formula company Bellamy's Organic which saw its revenue and profitability impacted by lower than expected demand, which led to increased inventory levels, excess ingredients and shortfall payments to suppliers.
