Infant formula maker and dairy products producer A2 Milk has had a solid profit lift on the back of increased sales, as it shakes up its production facilities, and plans a bonus payout to shareholders.
Key numbers for the 12 months ended June compared with a year ago:
- Net profit $203m vs $167.6m
- Revenue $1.9b vs $1.67b
- Net cash 1.06b vs $969m
- Final dividend 11.5 cents per share
The producer and exporter of the speciality products using a2 milk increased infant formula sales in the key Chinese market, while it stemmed losses at its Mataura Valley Milk plant and those in its export operation to the US.
However, the company, which is reliant on Synlait Milk for much of its infant formula product, announced a major shake-up in operations.
It will sell the loss making Mautaura Valley in Southland to Open Country Dairy, while it has bought the Chinese owned Yashili New Zealand Dairy Co owned by a subsidiary of the Mengniu Dairy Group for $282m.
Read More: Get more News from Dairy Sector
A2 said it would make a loss of about $130m on the Mataura sale, and intended to invest about $100m into the Pokeno plant to increase production.
Overall, the transactions will give a2 Milk net proceeds of about $100m.
“The acquisition of the Pokeno manufacturing facility and related products represents a pivotal moment for The a2 Milk Company and the execution of our supply chain transformation strategy,” the company said.
“The transactions enable the Company to build a better, higher growth, lower risk, end-to-end business and deliver substantial benefits to shareholders.”
Chair Pip Greenwood said the acquisition and divestment has allowed the company to look at its capital needs, and planned a $300m special dividend to shareholders after the deals were completed and it obtained the necessary Chinese approvals.
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