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FIRST CUT: A2 more than doubles 1H net profit

Wednesday 20th February 2019

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A2 Milk's first-half profit lifted 55.1 percent as infant formula revenue continued to soar.

Net profit rose to $152.7 million in the six months ended Dec. 31 from $98.5 million a year earlier as sales climbed 41 percent to $613.1 million, Auckland-based, Sydney-headquartered a2 said. 

Sales of infant formula totalled $495.5 million for the half – an increase of 45.3 percent on the prior year driven by share gains in China and Australia. 

Its earnings before interest, tax, depreciation and amortisation were $218.4 million, up 52.7 percent and ahead of analysts’ expectations.  

Looking ahead, A2 said it expects the group revenue growth rate in the second half to continue broadly in line with the first half and an “increased investment in brand-building in 2H19 is expected to support revenue growth in FY20 and beyond.” 

As a result, second-half ebitda margins will consequently be lower than in the first half, with full year ebitda as a percentage of sales expected to be approximately 31-to-32 percent, it said.   

Ebitda as a percentage of sales was 35.6 percent in the first half.  

The stock last traded at $12.87 and has lifted 38.5 percent over the past 12 months. 

(BusinessDesk)

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