A2 Milk Company reports strong growth

By Dairy News

THE A2 Milk Company has experienced growth in the Australian fresh milk market of 11.3 per cent, according to its recently released half-year interim report.

Liquid milk sales in Australia and the United States totalled NZ$104 million, up 28.7 per cent, with Australian sales accounting for $74.7 million.

Strong performance in the key product segments of infant nutrition and liquid milk, and across core markets, has seen the company make substantial gains in revenue and earnings, with infant formula up 33.1 per cent for the same period last year and growth into Chinese-labelled infant-nutrition products increasing 100 per cent to NZ$146.7 million.

Improved price yields and a shift to infant formula has seen gross margins increase to 57.2 per cent, resulting in a closing cash position of NZ$618.4 million.

Looking to the future, the company will continue to work with Fonterra on development of milk pools within Australia and New Zealand in an effort to build capacity and support future growth.

The company is also anticipating continued strong revenue growth in 2020 across all key regions, supported by increased marketing investment in China and the US.

Globally the potential impact to supply chains and consumer demand in China surrounding the coronavirus will continue to be monitored, with the company unable to quantify any impact, either positive or negative, for the full financial year.

The company has donated $480 000 each to the University of Queensland School of Chemistry and Molecular Biosciences and the Peter Doherty Institute for Infection and Immunity — a joint venture between University of Melbourne and Royal Melbourne Hospital — to assist in the development of a vaccine for the coronavirus.

The money will support research teams that are playing a leading role in the international effort to develop a vaccine.

The a2 Milk Company managing director Geoffrey Babidge said the company was pleased to be able to help.