22 Nov 2016

A2 Milk has strong start to the year, dividend policy expected

8:48 pm on 22 November 2016

There has been a near seven-fold increase in A2 Milk's net profit in the first four months of the year, while sales were nearly twice what they were the year before.

milk powder

Photo: 123rf

The speciality infant formula and milk products company's net profit rose to $22 million in the four months ended in October, compared with $3.2m the year earlier.

The company told shareholders at their annual meeting in Sydney that continued demand for its products in China helped drive sales up 96 percent to $155.2m in the four-month period.

It said there was a particularly large surge in sales leading up 11 November, which is known as singles day, (represented by the single digits 11/11) and is one of the biggest sales days of the year in China.

A2 Milk's underlying profit rose more than five and a half times to $35.5m, from $6.2m the year earlier.

It said the board expected to adopt a dividend policy at the end of the financial year ending in June, assuming there was a strong operating cash flow and no significant new capital demands.