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By Stephen Wright
WELLINGTON, New Zealand – Infant formula company a2 Milk Ltd. said its first-half profits had halved due to pandemic disruptions and China’s declining birth rate.
The company said on Monday it could not give an accurate forecast of future revenues and profits, but warned that the expected improvement in revenues would not translate into higher profits as it would spend significantly more on investments. in the mark.
A2 Milk’s July-December net profit of NZ$59.6 million ($39.9 million) was down 50.3% from a year earlier and its revenue of NZ$660.5 million was down 2.5%.
He said China’s infant formula market fell 3.3 percent in value in the first half due to the falling birth rate in the country.
A2 Milk in October had reported a prolonged period of reduced profitability after its business was disrupted by the Covid-19 pandemic and changes in its crucial market in China.
Shares of the company have fallen more than 70% since August 2020 following a series of downward earnings revisions as the pandemic caused a slump in formula sales via surrogate Chinese buyers. Its growth prospects in China have also become less certain due to a declining birth rate and the loss of appeal of foreign brands.
Write to Stephen Wright at [email protected]
