Infant Milk Formula company A2 Milk has reported a 21 percent profit boost as it looks to increase sales in China with a new manufacturing plant.
The company’s share price has increased 8.4 percent since the close of business on Aug. 15 to $8.66 at the time of writing.
A2 Milk plans to acquire (pdf) an infant formula plant in Pokeno, New Zealand, under Yashili New Zealand Dairy Co, a subsidiary of Yashili International (majority owned by China Mengniu Dairy Group).
The company will achieve this by buying all shares of Yashili New Zealand Dairy Co for about NZ$282 million, subject to regulatory approval.
In addition, A2 Milk and China Animal Husbandry Group plan to sell their stakes in Mataura Valley Milk to Open Country Dairy, subject to approval. A2 Milk has a 75 percent stake.
The company expects to receive net proceeds of about $100 million from the sale after adjusting for both cash and debt, conditional on China regulatory filing.
A2 Milk plans to invest $100 million to improve the new Pokeno plant and employ more than 100 people.
‘Pivotal Moment’: CEO
A2 Milk Company’s Managing Director and CEO David Bortolussi described the Pokeno manufacturing facility acquisition plan as a pivotal moment for A2 Milk.
“We are familiar with the Pokeno manufacturing facility and its team who are very capable—they have done an excellent job co-developing and producing our a2 Genesis and a2 Gentle Gold English label products recently,” he said.
He also commented on the divestment of Mataura Valley Milk.
“MVM is an advanced nutritional powder drying facility that continues to have significant potential but is no longer the optimal asset and pathway to achieve our strategic objectives.”
China Label Sales Soar
Looking at some key highlights for the company, revenue rose 13.5 percent to $1.9 billion (pdf) in the 2025 financial year.
This was driven by 13.9 percent gain the the China and other Asia markets and 22.5 percent growth in the U.S. market.
Infant Milk Formula total sales soared 9.9 percent, driven by English label market growth.
China label sales also rose 3.3 percent to $632.5 million, leading to the company achieving a record share in the China label market.
The company increased marketing investment by 13.7 percent to NZ$318.4 million, with a major focus on marketing to China.
“China marketing continues to make-up the vast majority of the group’s investment, accounting for over
90 percent of total FY25 marketing expenses,” the company noted. Administrative and other expenses fell.
Bortolussi said he was proud of what his team achieved in the 2025 financial year.
“We continued to grow market share in China to record levels, elevating The a2 Milk Company to a top four brand position in the world’s largest infant milk formula market,” he said.
Reflecting on the company’s marketing strategy in a recorded presentation, Chief Financial Officer David Muscat said, “the focus remained firmly on China.”
The Key Finance Figures
A2 Milk achieved (pdf) a Net Profit After Tax (NPAT) of NZ$202.9 million (US$119.6 million) in the 2025 financial year, up 21.1 percent on the previous year.
The company delivered basic earnings per share of 28 cents, up 20.9 percent on the 2024 financial year.
A2 Milk declared a full-year total dividend of 20 cents per share for the 2025 financial year. The final dividend was 11.5 percent per share, fully franked.
