By Jack ｜ACB News

The a2 Milk Company Ltd (ASX: A2M) rose to a two-year high after the dairy and infant formula group reported strong first-half results, upgraded its FY26 outlook and lifted its interim dividend.

In early Wednesday trade, shares touched A$9.92, their highest level since the stock rebounded from around A$3.70 in 2024, following the release of the company’s results for the six months ended 31 December 2025.

On a continuing operations basis — excluding the divested Mataura Valley Milk business — a2 Milk reported revenue of NZ$993.5 million, up 18.8% year-on-year. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 18.4% to NZ$155.0 million, while net profit after tax (NPAT) increased 9.4% to NZ$112.1 million. Basic earnings per share rose 9.2% to 15.5 New Zealand cents.

Excluding losses and one-off transformation costs linked to the ramp-up of its a2 Pokeno manufacturing facility, underlying EBITDA climbed 25.9% to NZ$164.8 million, and underlying NPAT rose 19.6% to NZ$122.6 million.

Revenue growth was broad-based, with China and Other Asia up 20.3%, Australia and New Zealand up 8.8%, and the United States up 29.1%. The company said it remained a top-four brand in China’s infant milk formula market with an estimated market share of 8.2%, up 0.2 percentage points from FY25.

Gross margin declined to 48.9%, down 1.1 percentage points, which the company attributed mainly to temporary manufacturing losses at its underutilised Pokeno facility.

The board declared an interim dividend of 11.5 New Zealand cents per share, representing a payout ratio of about 74% of continuing operations NPAT. The company reiterated its intention to declare a NZ$300 million special dividend, subject to regulatory approvals.

a2 Milk upgraded FY26 guidance and now expects mid double-digit revenue growth, an EBITDA margin of 15.5% to 16.0%, and NPAT to be higher than FY25.

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