HY Results 2019, page-35

Today’s NZ herald 

A2 milk profit breaks record 
A2 Milk said its net profit leapt by 55 per cent to $152.7 million in the six months to December, fuelled by continued strong sales growth in all key product segments - infant formula, liquid milk and milk powders.Sales of infant formula totalled $495.5m for the half - an increase of 45.3 per cent on the prior year driven by share gains in China and Australia, the alternative milk company said.The company also saw growth in its liquid milk business of 20.2 per cent to $83.4m, particularly in its key markets of Australia and the US. Sales of other nutritional products grew 40.4 per cent to $34.3m, driven predominantly by milk powders and supported by new products launched towards the end of last year.A2 Milk's EBITDA came to $218.4m – up 52.7 per cent on the previous corresponding period, and compared with market expectations of $200m.In its outlook statement for the full year, A2 Milk said the company has invested strongly it its capability to better understand its Chinese consumers, channel dynamics and ways of improving brand awareness."Following a very strong first-half performance, and encouraged by growing market share in China, the company is now in a position to reinvest the benefits of scale into increased marketing activities in the second half," it said, adding increased brand and marketing investment is expected to continue into 2020."The company expects group revenue growth rate in the second half to continue broadly in line with the first half," it said.The increased investment in brand building in the second half of 2019 is expected to support revenue growth in 2020 and beyond."Second half EBITDA margins will consequently be lower than in the first half, with full-year FY19 EBITDA as a percentage of sales expected to be approximately 31-32 per cent," it said.