A2 profits see dramatic drop

A2 profits see dramatic drop

New Zealand's A2 Milk Co. has seen profits flatline in fiscal 2014, as currency exchange and regulatory issues in China more than offset growth in Australia.

In a regulatory filing, the company said post-tax profit fell to NZ$10,000 (US$8,376), down from NZ$4.1m in 2013. EBITDA slid 66% to NZ$3.5m, the group added. The bottom line was "significantly" impacted by the negative impact of currency exchange, A2 revealed.

In the 12 months to 30 June, total sales were up 17% to A$111.3m. Growth was driven by a 31% rise in revenue generated in Australia, where sales and earnings came in "ahead of plan".

However, momentum of the group's Chinese infant formula business was hampered by regulatory changes in the market, A2 revealed.

"As a result of the uncertainties around registration impacting the confidence of sub-distributors and a slower build of the network by our distributor China State Farm, our infant formula sales into China were well below plan in the second half FY14."

Click here to view the full announcement.