BOOMING demand for its infant formula has prompted the A2 Milk Company to further revise up its earnings forecast for the 2016 financial year.  The a2 Milk Company advised at the time of its annual meeting on November 17 that, given the favourable trading performance during the first four months for its a2 Platinum infant formula products, group revenue was forecast to grow to $285 million for the 2016 financial year.

The company experienced a significant uplift in sales of infant formula in the month of November, exceeding the sales projected at the time of the previous forecast.  This is expected to continue in the month of December.  It now expects sales of a2 Platinum to be about $68 million for the six months to 31 December 2015.  Based on the current trading trends, the company has determined it appropriate to further revise its full year outlook upwards.  The company is now forecasting group revenue in the range of $300 million to $315 million, and Group operating EBITDA in the range of $33 million to $37 million for the 2016 financial year.

The changing and dynamic nature of the infant formula markets in both Australia and China continues to make forecasting challenging.  The company will continue to monitor its performance and provide further commentary with the release of the first half trading results in February.  “The infant formula market in Australia is rapidly evolving and experiencing significant growth,” the company’s managing director and chief executive officer Geoffrey Babidge said.  “The company has recently increased the supply of a2 Platinum infant formula to our customers, however, we continue to experience a level of out of stocks on shelf.

“The strong trading performance advised today provides further evidence of the increasing appeal of the a2 Platinum brand in Australia and China and the growth potential in additional markets in the future”.

Source: adf.farmonline.com