Shares A2 Milk Company to lowest point in year

The A2 Milk Company has had a - as the company itself reports - 'challenging first half year'. Profit has fallen by no less than 35% over the first half of the current financial year. The revenue forecast has also been revised downwards. Shares of the dairy company plunged 16% to their lowest point in a year after the figures were published.

The profit of The A2 Milk Company, which is solely engaged in marketing dairy products with the so-called 'A2 milk protein', fell by 35% in the first half of the financial year. This brings the profit between July and December to NZ $120 million, compared to NZ $184,9 million in the same period a year earlier. The decline in profits is mainly attributed to the corona pandemic, which has disrupted trade flows worldwide. Revenue for the same period is NZ $677,4 million.

Annual revenue is therefore expected to reach NZ$1,4 billion, which is at the lower end of the earlier forecast of NZ$1,4 billion to NZ$1,55 billion. It is a significant drop in revenue from the NZ $1,73 billion that was achieved in the previous financial year. As a result of the numbers, shares in The A2 Milk Company are down 16% to NZ $9,33 per share. It is the lowest level in a year. The stock has fallen by 41% over the past year. Shares of The A2 Milk Company are listed on the New Zealand's Exchange (NZX) and the Australian Securities Exchange (ASX).

Better expectations
The management of The A2 Milk Company does state in the report that it expects to be able to make up for some of this loss in the second half of the financial year. That is not surprising, given the research agency AMR recently announced that the market for A2 milk will triple in the coming years. By the year 2027, a market value of NZ $3,69 billion is expected.

Kimberly Baker

Kimberly Bakker is an all-round editor at Boerenbusiness. She also has an eye for the social media channels of Boerenbusiness.

k.baker @boerenbusiness. Nl

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