ATM-A2 MILK

[winner (n)]

Be able to update this soon

Fcast sales for F22 year are $1.39 billion - up 15% on prior year - that's pretty good

Suppose F23 forecasts will be rubbish after the full year announcement and they say who the secret new global customer is as well as expected huge gains in the USA

You cannot view this attachment.

[KW]

I think the recent share price bounce is much ado about nothing.

I think it was company supplied PR intentionally designed to distract from the other article that was published the same day saying they had lost their biggest customer.  But then, I'm a well known cynic lol

[CG]

"The real question is whether A2 can leverage this to establish itself in the US market in the long run," Ridgewell said.

But he noted the US formula market is much smaller than China's, and "has structurally lower margins, as well as trade barriers in the form of high tariffs and the onerous FDA approval process".

For the US market to be viable for A2 long term, the FDA would need to approve its products for sale on a long-term basis, and the US would need to axe tariffs.

"As yet, there are no signs that this will happen," Ridgewell said.

Yep, it's a question and not a given fact. If a2 can gain access now outcome will be known in couple years at best. US infant formula market is not just much smaller than China's it's smaller than many other countries. However, it's a big market for dairy and a2 need to establish itself as a dairy company and not just as infant formula company. But it looks like not many people understand that. So, expecting some miracle in short term is just naive.
Btw, high tariffs could be avoided by establishing local manufacturing company if needed. They do have money.

[CG]

Be able to update this soon

Fcast sales for F22 year are $1.39 billion - up 15% on prior year - that's pretty good

Suppose F23 forecasts will be rubbish after the full year announcement and they say who the secret new global customer is as well as expected huge gains in the USA

It's at upper end of my forest $1.36-1.39b. There won't be forecast for F23 (they never did forecasts except that time with downgrades when they tried to soften the blow), there will be guidance similar as at HY presentation. However, I would expect they will target at least 15% growth in revenue as management bonuses depend on that. Not sure what new secret global customer you are talking about? Probably confusing it with Synlait. There won't be any expectation of huge gains in US

[Shareguy]

The a2 Milk Company (a2MC, the Company) wishes to advise that earlier today it received notification from the US Food and Drug Administration (FDA) that, at this time, the FDA is deferring further consideration of the Company's request for enforcement discretion to import infant milk formula (IMF) products into the US.

The Company has also subsequently been advised by the International Dairy Foods Association (IDFA) that equivalent letters have been sent to all pending enforcement discretion applicants, indicating that the FDA is deferring any further review at this time of all pending applications.

Authorised for release by

David Bortolussi
Managing Director and Chief Executive Officer
The a2 Milk Company Limited

[Minimoke]

The FDA is going to review istelf. But its a review of process (and one that includes tobacco/vaping as well)

They have 60 days to investigate and report. Lets call it August and September.

Nothing happens fast in govt departments. Lets give them six years to implement key changes. You dont unravel this in a hurry "In May, Califf testified before Congress about missteps that slowed the agency's response to contamination problems at the Michigan formula plant that triggered the shortage. While many of the problems happened before Califf started on the job, he struggled to explain who was ultimately responsible for food safety within FDA's bureaucracy.FDA's food program has a byzantine leadership structure in which there is a director for food and a separate deputy commissioner for "food policy and response."

The FDA boat has sailed and A2 isn't on it "Califf previously predicted the formula shortage could last until July. He said Tuesday that retail data show that supplies have improved with increases in both U.S. production and imports."What you're going to see is a gradual climbing out of the current situation as more and more formula becomes available," Califf said."

More here: https://www.pressherald.com/2022/07/19/fda-weighs-oversight-changes-after-formula-juul-troubles/

Today's announcement no surprise

[Left Field]

The USA FDA thing is not necessarily the panacea many think it is.

As I understand it, at present ATM hasn't got the stock of IF to supply a potentially huge USA market. Besides which, ATM may be better to sell its current IF stocks to Asia/China markets where it can get better margins/returns for IF than in the USA.

Maybe when MVM is up to speed ATM will be able to turn their attention to the USA IF market.... if the FDA allows it and if it can be done profitably.

Indeed no surprise with today's news.....but SP getting a reality check just the same.

[Minimoke]

Indeed no surprise with today's news.....but SP getting a reality check just the same.

Reality is to always deal with fact rather than speculation. Especially with shares that are renown for their manipulated market.

Annual results coming. Time to sit back and wait for the detail

Otherwise this remains a traders dream

[KW]

NZ should have bought some submarines   

[Minimoke]

Not ATM. But off a farm not far from Synlaits plant. Thanks guys - for getting your advertising out on the local radio

https://www.canterburyschoice.co.nz/

[BlackPeter]

Not ATM. But off a farm not far from Synlaits plant. Thanks guys - for getting your advertising out on the local radio

https://www.canterburyschoice.co.nz/

Looks interesting. They seem to have real milk, even real bread and salami (not the cr*p most supermarkets sell in NZ).

I would try, but given we have all this stuff ourselves (homemade) - I'll leave it to others to try.

[Left Field]

Results out today look encouraging.......A2 back on track........... Share buy back will help maintain SP growth.... this holder happy.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/397774/377781.pdf

• Revenue growth of 19.8% to $1,446.2 million (11.2% ex-MVM3) with 2H22 up 18.9% on 1H22 (15.7% ex-MVM)
- China label and English label IMF sales up 12.2% and 11.6% respectively
- ANZ and USA liquid milk sales up 1.8% and 30.2% respectively
• Earnings before interest, tax, depreciation and amortisation (EBITDA4) up 59.0% to $196.2 million. EBITDA to sales
margin increased to 13.6% (16.1% ex-MVM) compared to 10.2% in FY21
• Net profit after tax (NPAT) including amounts attributable to non-controlling interests up 42.3% to $114.7 million with $122.6 million attributable to owners of the Company5
• Earnings per share up 51.8% to 16.5 cents in FY22 compared to 10.9 cents in FY21
• Strong balance sheet with closing net cash6 of $816.5 million with operational cash conversion7 of 114% during the year
• Positive outlook for FY23 with high single digit revenue growth and EBITDA margin improvement expected (see Outlook below for further detail, including key industry and business risks)

[Minimoke]

Finally some good news. And finally an announcement on doing something with the shed load oaf cash. After buyback still leaves them with $666m in the bank - so loads of opportunity to reinvest that I hope they maximise.

Wil be interesting to see how fickle market reacts today. 7% increase on the cards.

[KW]

That puts it on a current P/E of 33 with "single digit growth" forecast.  So still overpriced   

I guess management would prefer a share buy back rather than a dividend as the share buyback gets them their performance shares/options.  But in a bear market where prices will continue falling, its basically just pissing money away.  At least a dividend is cash in the hand that shareholders can use to help with the escalating cost of living that everyone is experiencing right now.  Maybe can afford some of that $20 a block cheese lol.

[Minimoke]

That puts it on a current P/E of 33 with "single digit growth" forecast.  So still overpriced   

I guess management would prefer a share buy back rather than a dividend as the share buyback gets them their performance shares/options.  But in a bear market where prices will continue falling, its basically just pissing money away.  At least a dividend is cash in the hand that shareholders can use to help with the escalating cost of living that everyone is experiencing right now.  Maybe can afford some of that $20 a block cheese lol.

Not wrong on that front. I could have enjoyed a $0.20 dividend