China-focused infant formula maker a2 Milk is about to post a 68pc revenue lift
Health & Biotech
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The a2 Milk Company, whose infant formula is loved in China, is about to post a 68 per cent jump in full-year revenue to $NZ922 million ($846 million), exceeding the high end of its own guidance.
Dairy and infant formula exporters such asA2 Milk, Bubs, Jatenergy, Bioxyne, Wattle Health, Bellamy’s and have all made big share price gains over the past year.
a2 Milk (ASX:A2M) has been one of the ASX’s best performing large caps with an annual gain of 180 per cent.
The dairy stock today told investors unaudited numbers also show an EBITDA earnings-to-sales ratio for the 2018 year of 30 per cent.
Final 2018 results are due in August.
a2 Milk says it expects further growth in revenue in 2019.
Spending on marketing will be higher given continuing investment in Australia, activities in China and increased investment to support expansion in the US.
And overheads will rise mainly due to increasing headcount for China and corporate headquarters sto support the increasing scale of the company.
Earlier this month, a2 Milk announced an extension to its supply deal with Synlait, the New Zealand-based infant formula company.
The deal also increases the volume of infant formula products as demand for a2 Platinum infant formula continues to grow in China and in Asia.
Jayne Hrdlicka, a former CEO of the Jetstar, is taking over as CEO of a2 Milk on Monday next week.