A2 Milk jump in profit forecast

Posted by AFN Staff Writers on 15th June 2016

A2 MilkThe A2 Milk Company has revised its expected profits for the 12 months ended 30 June 2016.

It now expects its revenue to be between NZ $350 million – $360 million. It also expects its earnings before interest, taxes, depreciation and amortization (EBITDA) to be between NZ $52 million and $54 million.

This is an increase on a forecast made in February 2016 when the A2 Milk Company predicted revenue to be NZ $335 million – $350 million and EBITDA as NZ $45 – $49 million.

A2 Milk company manages China regulatory transition

The company said it has revised the figures for the better due to is ability to handle the recent changes in the regulation of infant formula in China.

“A number of changes to the infant formula regulatory environment in the China have been announced over recent months including: taxation of Cross-Border E-Commerce (CBEC) Traded Commodities, publication of product lists for CBEC traded commodities through China free trade zones and, more recently, an Infant Formula Registration Rule for both domestic and imported infant formula products into China,” the A2 Milk Company said in a statement to the Australian Securities Exchange (ASX).

A2 Milk Company manages regulation change 

“The Company previously advised that it considers itself well placed to respond to changes in the infant formula regulatory environment in China. The Company continues to adjust and evolve its manufacturing and distribution model in response to such changes. In particular, the Company remains of the view it is alert and well placed to respond to other potential changes in the regulatory environment,” the A2 Milk Company stated.

Projections for growth

The revised forecast is based off the continuation of recent trading performance and no material change in June market conditions.

The latest projection reflects strong underlying growth in the China infant formula market.

The A2 Milk Company achieved a record net profit of NZ $10.1 million for the six months ended the 31 December 2015 largely driven by increased infant formula sales.

Other related articles:

China delays restrictions on foreign online food product purchases

Infant formula driving record results for A2 Milk Company

A2 Milk rejects takeover by Freedom Foods and Dean Foods