A2 Milk's Special Dividend
A2 Milk Reports Strong Revenue Rise, Distributes $300 Million Special Dividend
Key Points
Underlying earnings metrics were helped by excluding a2 Pōkeno ramp-up losses and one-off transformation costs, with EBITDA up 5.4% on an underlying basis while the reported figure fell 2.5%. The specific exclusions include a $23.2m EBITDA loss and a $28.3m NPAT loss from Pōkeno.
Discontinued operations related to the Mataura Valley Milk divestment weighed on the reported NPAT, with about $96.4m of the NPAT loss coming from discontinued operations and total NPAT on continuing operations around $111.1m.
The fourth-quarter China label supply disruption is described as resolved, with product availability significantly improved and management signaling an IMF recovery trajectory across the year.
In the United States, revenue rose about 28.6% and the business achieved break-even in the second half, highlighting improving profitability in a key market.
FY27 capex guidance is around NZ$70 million to fund ongoing innovation, sustainability and supply chain transformation, with management promising an IMF recovery plan update at the AGM and the balance sheet remaining robust (net cash around NZ$784.5 million; operating cash conversion about 68%).
The a2 Milk Company posted FY26 revenue of NZ$1.97 billion, a 12.4% jump driven by English-label infant formula, liquid milk, and other nutritionals, according to Motley Fool Australia. The company also declared a NZ$300 million special dividend — 41.36 cents per share — on top of ordinary dividends totaling 21.0 cents per share for the year.
Despite strong top-line growth, headline EBITDA slipped 2.5% to NZ$284.4 million, weighed down by ramp-up costs at the new a2 Pōkeno facility and one-off transformation expenses, StockWireX reported. Strip those out and underlying EBITDA rose 5.4%, painting a healthier picture of the core business.
China Label Disruption Dented Sales But Is Now Resolved
A supply disruption in the fourth quarter hit China-label infant formula (IMF) sales hard. The problem briefly limited product availability in the crucial Chinese market. Management says the issue is now fixed and stock levels have improved significantly, according to StockWireX.
The company says an IMF recovery plan update will come at the upcoming AGM. Market Watch noted that management is signaling stronger revenue and improved profit margins in the new fiscal year, despite the disruption lingering into the first half of FY27. Growth across every geographic segment in FY26 gives the company confidence heading into the recovery.
USA Breaks Even as Revenue Surges 28.6%
The United States was a standout performer. US revenue jumped about 28.6% in FY26, and the business hit break-even in the second half of the year. That is a meaningful milestone for a market that has long been a drag on group profitability, according to StockWireX.
Australia–New Zealand liquid milk also grew, helped by product innovation and market expansion. The company leaned on new product launches across multiple segments to keep momentum going. Management says these efforts will continue to underpin growth into FY27.
Pōkeno Facility Costs and Divestment Dragged Reported Profit
The a2 Pōkeno dairy facility racked up a NZ$23.2 million EBITDA loss and a NZ$28.3 million NPAT loss as it ramped up operations. These were excluded from underlying figures. On a reported basis, net profit after tax (NPAT) fell 5.8%, according to Motley Fool Australia.
The divestment of Mataura Valley Milk added further pain. About NZ$96.4 million of NPAT losses came from discontinued operations tied to that sale. Continuing operations delivered NPAT of around NZ$111.1 million. On an underlying basis — stripping out one-off items — NPAT rose 7%.
NZ$300 Million Special Dividend Backed by Rock-Solid Balance Sheet
The company ended FY26 with net cash of NZ$784.5 million. That war chest allowed it to hand shareholders a NZ$300 million special dividend worth 41.36 cents per share, plus ordinary dividends of 21.0 cents per share for the full year. TipRanks noted the interim ordinary dividend of NZD 0.095 per share is payable on 2 October 2026 and will be fully franked.
For FY27, A2 Milk is guiding for mid-single-digit revenue growth and an EBITDA margin of around 15%. Capital spending is set at roughly NZ$70 million to fund innovation, sustainability, and supply-chain upgrades. Operating cash conversion came in at about 68% for FY26, according to StockWireX.
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