A2 Milk said a strong performance in China – helped drive its net profit up by 26.2% to $144.8 million in the June year. But a disappointing earnings outlook drove the share price down by 42 cents or 8.4% to $4.93 in early trading. Shares in The a2 Milk were the biggest decliner on the market, after the milk marketer warned of a “more challenging” year ahead. A2 Milk reported revenue of $1.59 billion in the year to the end of June, but forecast low single digit revenue growth this year, lagging behind expectations. Formula companies like A2 Milk are coming under pressure as the Chinese market, the world’s largest, is shrinking and becoming increasingly competitive as the number of newborns declines. Chinese data shows the number of newborns fell 10% last year to 9.6 million and A2 Milk expects it to decline further this calendar year.
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