A2 milk records 80-fold surge in profit

A2 milk records 80-fold surge in profit

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Australian diary company A2 milk has recorded a staggering 80-fold surge in profit, thanks the overwhelming sales of its infant formula. Net profit of A2 milk increased from $NZ125,000 a year ago to $NZ10.1 million ($A9.34 million) in the six months to December.

The company’s biggest market China is certainly in short of supply. The super rich Chinese affluent class has a great appetite for high quality health products and the formula milk being one draws in huge attraction. “We haven’t been able to meet demand because the reality is demand exceeded our expectations,” a2 Milk chief executive Geoffrey Babidge told AAP.

A2 milk found its biggest market in China in the recent years with the sales of its current flagship product infant formula increased. The New Zealand based company performs well in Australia, New Zealand, China, United States and the United Kingdom markets.

 

The company has asked its supplier Synlait Milk, to increase production. “Whether we fully meet the demand in Australia and China is yet to be seen because we haven’t had the product available to be able to meet all orders,” Mr Babidge said.

Shares also rose to  five cents, or 2.7 per cent, to $1.925. This was valued at 55.5 cents during March 2015 when the company was listed on the Australian market. Since now the strategy of the company has been reinvesting the profit. It until now haven’t paid dividends to shareholders, but with the new development this is expected to change.

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