A2 Milk shares surge 19% as revenue forecast upgraded, first dividend declared

AUSTRALIA – A2 Milk shares surged on the ASX following the company’s announcement of an upgraded full-year revenue growth forecast and its first-ever dividend declaration. 

The stock climbed 19% to US$7.08 at 1:55 pm AEDT, extending its 12-month gains to around 40%.

The strong market reaction followed better-than-expected financial results, with Citi analysts calling it a significant beat to market forecasts. 

The company’s net profit for the first half of the financial year exceeded average estimates by 10%, prompting analysts to anticipate an upgrade in consensus net profit after tax (NPAT) by 5% to 10% for the full year.

A2 Milk revised its revenue growth guidance for the 2025 financial year from mid-to-high single digits to a low-to-mid double-digit percentage. 

It also declared a dividend of 8.5 cents per share, payable on April 4, marking a milestone for the company. 

The half-year financial results showed a 10% rise in revenue to NZ$893.8 million (US$805.01 million), while net profit increased by 7.6% to NZ$91.7 million. 

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew by 5% to NZ$118.9 million, with a margin of 13.3%.

The company’s growth was driven by a record market share in its China-labelled infant milk formula and double-digit growth in English-label IMF sales. 

Revenue from China and other Asia markets increased by 11.8%, while the US market recorded a 13% rise. 

However, revenue in Australia and New Zealand fell by 2.7%, largely due to a continued downturn in the Daigou channel. A2 Milk’s net cash position strengthened to NZ$1.01 billion, reinforcing its financial stability.

CEO David Bortolussi attributed the strong results to the company’s strategic approach. 

“Our strong first-half results and momentum going into the second half have resulted in an upgrade to our FY25 revenue and earnings guidance,” he said. 

“We are pleased to declare our first-ever dividend, recognising the substantial progress we have made as a business and rewarding our shareholders for their continued support.”

Market analysts noted that the company’s ability to maintain growth despite regional downturns reflects its strong brand positioning and effective expansion strategy. 

The upgrade in revenue projections and the dividend declaration were seen as signals of confidence in future performance. 

The company’s progress in key international markets, particularly China, where demand for premium infant formula remains high, played a critical role in its financial success. 

Industry experts anticipate that continued growth in China and the US, along with potential recovery in ANZ, will further support A2 Milk’s performance in the coming quarters.