A2 Milk expects China label sales to recover in 2027

Author: Jamie Gray,
Publish Date: Mon, 17 Aug 2026, 9:48am

Infant formula company a2 Milk has released its annual result.

A2 Milk has increased its underlying net profit by 7% to $235.8 million in the June year, despite supply chain disruption in its final quarter.

The “underlying” profit excluded losses associated with acquisition of its infant formula facility at Pōkeno (for $282m), last year.

The company’s net profit was $207.5m, down 5.8% on the previous year.

Group revenue rose by 12.4% to $1.975 billion – in line with the company’s own guidance.

The company’s earnings before interest, tax, depreciation and amortisation (ebitda) came to $207.5m, down 5.8%.

A2 Milk finished 2026 with $784.5m in cash.

The company said the increase in revenue was driven by growth in English label infant milk formula, other nutritionals and liquid milk.

Revenue growth was partially offset by a reduction in China label sales driven by supply chain disruption in the fourth quarter, “with the contributing factors now resolved and product availability significantly improved”.

A2 declared a final dividend of 9.5 cents per share, taking the total for the year to 21c (from 20c).

A special 41c dividend (totalling $300m) – as foreshadowed in August 2025 – was paid following regulatory approvals.

A2 said its revenue and ebitda was expected to grow in 2027, supported by increased contribution from product innovation and new markets, continued momentum in Other Nutritionals and Liquid Milk, and a2 Pōkeno profitability improvement.

It said infant formula sales were expected to be impacted by the flow-on effects of supply chain disruption in the fourth quarter of 2026.

“At this stage, the company expects infant formula sales to be broadly similar to 2026, with China label to gradually recover over the course of 2027 and English label offtake momentum to improve during the first half, supported by an increase in marketing particularly in first half 2027.”

The company forecast revenue growth of mid single digit per cent, with first half 2027 revenue broadly in line with first half 2026.

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.