A2 Milk shares surge on first-half results
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More news: A2 Milk shares skyrocketed after the dairy producer recorded year-on-year earnings growth, driven by a 16.5% revenue rise in its China segment.
Shares were trading 15.5% higher at 1:10pm AEDT.
A2 Milk first-half results bolstered by Chinese market
The news: Dairy producer A2 Milk reported improved revenue and profit in its half-year results, aided by growth in its Chinese market products.
The numbers: The New Zealand company recorded first-half profit of NZD85.3 million ($80 million), up 15.6% compared to the prior corresponding period. EBITDA grew 5% to NZD113.3 million year-on-year, with first-half revenue up 3.7% to $812.1 million. A1 also posted a 16.5% rise in its China segment, offsetting a 24.1% downturn in Australia and New Zealand.
The context: A2 Milk CEO David Bortolussi said that the company's growth strategy is primarily focused on the Chinese market, which now represents around 80% of its total branded sales. However, the dual-listed dairy company said China's infant milk formula market conditions "remain challenging with a double-digit decline in market value still expected in FY24".
A2 Milk increased its full-year revenue growth guidance from "low, to low-to-mid single-digit percent" on the prior year.
What they said: Bortolussi commented: “After several years of COVID-19 related disruption and market decline, we are pleased that our A2 platinum sales and the English label market have stabilised compared to 2H23".
The source: ASX announcement
