AUS
NZ
UK
CA
USA
IND
.jpg)
Highlights
- ATM will be releasing its half-yearly results next week.
- ATM’s business was significantly affected in FY21 due to the COVID-19 pandemic and border closures.
- The Group has taken many measures and changed its growth approach to perform better.
Infant nutrition company, The a2 Milk Company Limited (NZX:ATM; ASX:A2M), is due to release its half-year results on 21 February 2022.
Here is a look at the firm’s performance till date.
ATM reported a disappointing FY21 with its revenue and EBITDA falling by 30% and 78% on pcp, respectively. ATM witnessed substantial volatility in its business due to the COVID-19 pandemic and border closures that impacted cross-border sales and other exports.
Image source: © 2022 Kalkine Media®, Data source- EODHD/Others
The Group had to face excess inventory that it had built to meet expected increased demand from consumers at the start of the pandemic. However, the same did not materialise, leading to excess inventories.
Subsequently, these challenges impacted its English label IMF with sales falling by 52% in the period. This had even counteracted the increase in sales registered by the Group in its China label IMF and the Australian milk business.
Key measures taken by the Company
ATM took several measures to overcome these challenges in Q3 FY21. The Group adopted measures to deal with extra inventory and restrict sales to provide support to English label IMF market pricing. The Group also increased its brand investment, strengthened the leadership team, reorganised the Asia-Pacific division.
DO READ: ATM, SML, FCG- 3 NZX dairy stocks in focus
The Group also renewed its growth approach and has set 5 priority areas to achieve its ambitions. ATM plans to invest in people and leadership, achieve full potential in China IMF, ramp up product innovation, alter its supply chain and attain profitability.
ALSO READ: The a2 Milk (NZX:ATM): What is the Company’s growth strategy?
ATM is growing its portfolio in China to focus on the entire family with an aspiration to produce $200 million in sales in the medium term. The Group also plans to grow in the US and the ANZ market.
Share price performance
ATM’s share price had surged last month after reports that the firm would be acquired by a Canadian dairy firm Saputo. The Group had also been in news for takeover talks.
DO READ: The a2 Milk (NZX:ATM) shares soar amid takeover speculation
On 18 February, the a2 Milk’s shares ended the trading session at $5.62, down 2.09% from its previous close.
ATM’s shares have fallen 13.12% in the last 3 months and are down 53.74% year to date.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)