Sharechat Logo

A2 Milk lifts guidance for full-year sales, earnings as trading exceeds targets

Wednesday 15th June 2016

Text too small?

A2 Milk raised its guidance for full-year sales and earnings, saying trading is exceeding its targets and the milk marketing company is well placed to cope with changes to regulations for infant formula in China.

Revenue is forecast to be in a range of $350 million to $360 million in the year ending June 30, from a previous forecast of $335 million to $350 million. Operating earnings before interest, tax, depreciation and amortisation are projected to be $52 million to $54 million, up from the $45 million-to-$49 million range it gave with its first-half results in February.

The improved guidance is dependent on recent trading conditions continuing and no material change in market conditions, the company said in a statement. A2 was"well placed to cope with changes to infant formula regulations in China announced in 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 an infant formula registration rule for domestic and imported infant formula products in China. 

A2 has "previously advised that it considers itself well placed to respond to changes in the infant formula regulatory environment in China," it said. "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."

As a result, it "continues to perform strongly compared to its plan in the second half of FY16," A2 said. The company also expects its balance sheet to be stronger by year-end, reflecting improved operating cash flow in the second half with cash on hand likely to exceed $50 million. 

Shares of A2 have soared 170 percent in the past 12 months, although year-to-date they are down about 16 percent and last traded at $1.57. The stock is rated a 'hold' based on the consensus of four analysts compiled by Reuters. A2 is scheduled to join the S&P/ASX 200 Index at the close of trading on June 17.

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

19th June 2019 Morning Report
NZ dollar firms on signs US-China trade talks moving forward
Dairy product prices slump for third consecutive time
Chevron, Equinor depart NZ exploration scene
MARKET CLOSE: NZ shares gain as investors eye upcoming Fed meeting
Spark using 'free' rugby offer to lock out competitors, says 2Degrees
NZ dollar rises against the Aussie after RBA indicates further rate cuts
Gold Report 18th June 2019
Electricity Authority urged to test privacy status of meter data
Shorn Fonterra likely to keep ingredients business - Jarden

IRG See IRG research reports