A2 Milk reports strong first-half growth and declares first-ever dividend
The a2 Milk Company (ASX: A2M) has reported solid financial results for the first half of the 2025 financial year, upgrading its full-year guidance and announcing its first-ever dividend.
For the six months ending 31 December 2024, the company recorded a 10.1% increase in revenue to NZ$893.8 million, driven by growth in key markets. Net profit after tax (NPAT) attributable to shareholders rose 7.6% to NZ$91.7 million, while EBITDA grew 5.0% to NZ$118.9 million, despite increased freight costs linked to earlier supply constraints.
Strong performance in China and English label growth
China remains a core focus for a2 Milk, with revenue in the China & Other Asia segment rising 11.8% to NZ$614.2 million. Sales of English label infant milk formula (IMF) increased 22.7%, benefiting from a broader market shift towards imported brands. Meanwhile, China label IMF sales grew 2.0%, despite an 8.0% decline in the overall market.
A2 Milk has maintained its position as a top-five IMF brand in China, achieving a record 5.3% market share. The company is also expanding its presence in emerging markets, having launched a2 Platinum in Vietnam and secured registration for a2 Gentle Gold ahead of a planned second-half launch.
Declining Daigou channel impacts ANZ market
Revenue in the Australia & New Zealand (ANZ) segment fell 2.7% to NZ$157.7 million, largely due to continued weakness in the Daigou channel. However, this was offset by 11.2% growth in liquid milk sales, driven by demand for a2 Milk Lactose Free.
US operations improve profitability
A2 Milk’s US segment achieved a 13.2% increase in revenue to NZ$64.5 million, with growth in its core milk portfolio and Club channel. The company reduced its EBITDA loss in the region to NZ$4.9 million, down from NZ$8.3 million in the prior corresponding period. A2 Milk is progressing efforts to secure long-term US Food and Drug Administration (FDA) approval for its IMF products, having submitted a New Infant Formula Notification in the second quarter.
Dividend and upgraded guidance
A2 Milk declared an interim dividend of 8.5 cents per share, fully imputed and franked, amounting to 67% of net profit. The company now expects full-year revenue growth of low to mid double-digit percentages, up from its previous mid to high single-digit guidance.
The company continues to invest in product innovation, recently launching a2 Genesis, a premium English label IMF product containing human milk oligosaccharides (HMO), as well as expanding its range of fortified milk powders targeting senior and child nutrition.
With a strong balance sheet and NZ$1.014 billion in net cash, a2 Milk remains focused on strengthening its supply chain, particularly in China and New Zealand, while exploring growth opportunities in emerging markets.
