27 Feb 2020

A2 Milk proft rises as infant formula sales increase

9:50 am on 27 February 2020

A2 Milk has delivered a strong financial result, with increased sales in its infant nutrition business and with better than expected profit margins.

Serving fresh milk in a glass vase on a wooden table

Photo: 123RF

The specialty milk company's net profit rose 21 percent in the six months to December to $184.9m, with an underlying sales margin of 32.6 percent.

Sales rose 32 percent to $806.7m, with a 33 percent gain in the infant nutrition business.

Liquid milk sales in Australia and the United States rose 29 percent.

It said US sales more than doubled to $28m. The company aimed to achieve sales of US$100m.

It nearly doubled its spending on marketing, driving overall expenses up 63 percent.

It said the Covid-19 coronavirus could potentially increase supply chain costs, but expected its full year underlying profit margins to be in a range of 29 percent and 30 percent.