A2 Milk shares slide 10% on ASX after weak China outlook
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More news: A2 Milk shares are down more than 10% to $4.44 in early trading on the ASX after the dairy producer warned of double-digit decline in market value in the key China market, due to increased competition for infant formula products and lower birth rates.
A2 Milk lifts full-year profit, flags China risks
The news: New Zealand dairy producer A2 Milk has reported a solid lift in full-year profit and sales but warned its key China market will be more challenging in the year ahead.
The numbers: Net profit for the year to 30 June rose 27% to NZD155.6 million ($144 million). Revenue was up 10.1% to NZD1.59 billion, at the lower end of its guidance range. Sales in its China & Other Asia segment jumped 37.9% but Australia/New Zealand sales dropped 30.2%.
The context: Despite the strong results, the dual-listed dairy producer has flagged more uncertainty in the China infant formula market, warning of a further double-digit decline in market value due to increased competition and lower birth rates. Dairy exporters have felt the impact of a slow economic recovery in China, the world’s biggest infant formula market.
What they said: "Notwithstanding (China challenges), we are well positioned to continue to invest and grow share in FY24 to emerge in a stronger position when the market recovers,” a2 Milk chief executive David Bortolussi said.
The source: ASX announcement
