The A2 Milk Company’s full-year net profit has risen by 198 per cent to $NZ90.6m ($A83.4m), boosted by increased sales of infant formula mainly in China.
Infant formula generated 72 per cent of the company’s total revenue for the year – up from 61 per cent in the 2016 financial year.
The company is clearly focused on sustainable growth of a2 Platinum infant formula through significant investment in product supply and quality, building brand awareness and strength, and meeting the requirements of China’s regulatory regime.
In Australia, a2 Milk branded fresh milk achieved further growth in sales, while a2 Milk branded whole milk powder, introduced in the previous year, showed strong growth.
Continuing earnings momentum has led to a further strong increase in the cash position. Net operating cash flow for the year was $99.9 million, compared with $21.5 million in the pcp and in particular benefited from lower than targeted infant formula inventory due to strong demand.
The closing cash on hand of $121.0 million was after an investment of $48.7 million in shares in Synlait Milk Limited.
“The Company’s continued growth reflects increasing consumer acceptance of the a2 brand and the benefits of dairy-based products free from the A1 beta casein protein type,” Managing Director Geoffrey Babidge said in a statement.
“We have continued to support and expand our brand proposition through effective marketing and promotional activities in each of our markets. Our support for relevant scientific research and continued investment in intellectual property are also key aspects of this strategy.