A2 Milk's net profit down 44 percent on one-offs
The fall is in line with its expectations, with the sale and purchase of large-scale processing facilities.
A2 Milk experienced a significant 44 percent decrease in its net profit, as reported in its latest annual results. The company attributed this decline to the sale of its Matara Valley business and the acquisition of a2 Pōkeno. CEO David Bortolussi explained that the Matara Valley sale resulted in a $96 million net loss, while the purchase of a2 Pōkeno was anticipated to be profitable this financial year.
Despite these one-time costs and losses, underlying profit for the full year ended June increased nearly 5.5 percent to over $300 million, excluding the aforementioned one-time expenses. The company maintained its full year dividend at 21 cents per share, a 5 percent increase from the previous year. The company's performance was also impacted by supply chain disruptions in the China label infant formula (IMF) sales in the fourth quarter.
Bortolussi expressed confidence in the company's long-term prospects, citing the successful acquisition and transformation of a2 Pōkeno, which will strengthen its supply chain and enable growth with the launch of two new China label infant milk formula products in the first half of FY27. However, the company acknowledged ongoing supply chain challenges and expects revenue and underlying profit growth to be more heavily weighted towards the second half of FY27.
Bortolussi also declined to comment on media speculation regarding a potential buyout of Synlait Milk, a long-term supplier and partner with dairy co-operative Fonterra.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
