Australia's a2 Milk profits surge 47 percent on the back of Chinese demand
Full-year profits for New Zealand milk producer a2 have soared 47 percent from last year on the back of surging Chinese demand, the company reported to the Australian Securities Exchange on Wednesday.
Buoyed by a massive jump in infant formula sales in China which climbed 74 percent, a2 recorded an annual net profit of 272 million Australian dollars (184 million U.S. dollars)s.
"The company delivered record financial and market share results for 2019," a2 chief executive Jayne Hrdlicka said.
"This was enabled by strong revenue growth across our key product segments of liquid milk, infant nutrition and other nutritional milk products, and across each of our key regions," she said.
"We have focused on really getting to know our consumers and sales channels in our core markets of China and the US. The a2 Milk Company's unique brand proposition intrinsically leverages macro consumer factors, which include a growing consumer demand for health and wellness products; a growing focus on food safety, naturalness and provenance; the growing middle class in Asia; and the rapid pace of digitization," she added.
But despite the strong result, it wasn't all good news for a2 today.
Although profits soared, the figures fell short of market expectations by around 3.0 percent with Bloomberg consensus predicting a net uptick of around 280 million Australian dollars (190 million U.S. dollars).
As a result, the company's stock price plummeted 14.8 percent just after 12:00 pm local time to 13.63 Australian dollars (9.24 U.S. dollars) per share.