The A2 Milk Company Ltd (ASX: A2M) share price went up over 9% today, hitting a record high.
If you didn't already read our coverage of the result, I'll fill you in one some of the details.
In New Zealand dollar terms, A2 Milk grew total revenue by 41% to $613.1 million for the six months to 31 December 2018. Earnings before interest, tax, depreciation and amortisation (EBITDA) went up 52.7% to $218.4 million.
Net profit after tax (NPAT) increased by 55.1% to $152.7 million and earnings per share (EPS) increased by 52.9% to 20.9 cents.
I think you'll agree that those numbers are impressive after the years of considerable growth we've already seen. A2 Milk also quite comfortably beat the market's expectations.
As always, the infant formula segment was key for A2 Milk, delivering revenue of $495.5 million, reflecting growth of 45.3%. China labelled revenue went up by an astounding 82.6%. The China segment as a whole grew revenue by 50.1% to $171.7 million. The A2 Milk company said it is achieving considerable momentum in smaller Chinese cities.
Despite the focus on infant formula, the liquid milk business grew revenue by 20.2% to $83.4 million. It did particularly well in Australia and the US.
What will the second half of FY19 bring?
Management expect that revenue growth will continue to be strong in the last six months of FY19, but the company will invest further in marketing to grow in China and the US. Whilst this may affect the full-year result and EBITDA margins somewhat in FY19, it should lead to even more growth in FY20 and beyond.
Whilst I wouldn't call A2 Milk a buy today due to its strong share price performance in recent weeks, I would happily buy its shares on more market weakness which we saw in October 2018.
