Aug 17 (Reuters) – New Zealand’s a2 Milk reported a 44% drop in its full-year profit on Monday as customers switched to other brands after supply chain disruptions left its key China-label infant milk formula (IMF) product out of stock.
Revenue from China-label IMF sales declined by 14% to NZ$544.3 million ($320.59 million) in the year ended June 30, as strong third-quarter demand, production backlog, and higher freight costs disrupted supply and caused product shortage in the June quarter.
The disruption “materially impacted in-market product availability during 4Q26 and necessitated a large proportion of existing users to switch to alternative brands as they ran out of pantry stock mainly in June,” the company said.
However, it added that stock levels had significantly improved and it was focusing on “regaining past users and accelerating new user recruitment”.
As a result, the dairy producer’s net profit attributable fell to NZ$113.6 million for the year, missing the Visible Alpha consensus estimate of NZ$121 million, and below last year’s NZ$202.9 million.
On an underlying basis, a2 Milk reported full-year profit of NZ$235.8 million, 7% higher than last year.
Revenue from its largest market, China & other Asia, rose 11.2% in the year to NZ$1.45 billion, led by higher sales of English-label IMF products.
The company declared a final dividend of 9.5 New Zealand cents per share, down from the 11.5 cents a year earlier
($1 = 1.6978 New Zealand dollars)
(Reporting by Shruti Agarwal and Anjali Singh in Bengaluru; Editing by Edmund Klamann and Chizu Nomiyama)
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