The nine months runs to March 31.
A2 is investing heavily in organisational structure and market and brand development in China and the United States and has confirmed second-half operating earnings (Ebitda) margins will be lower than in the first-half. Full-year Ebitda as a percentage of sales is expected to be about 32%, compared to the first-half figure of nearly 36%.
The marketing spend in the second-half will be about double the first-half level, encouraged by increasing market share in China.
A slightly weaker Aussie dollar versus the New Zealand dollar will also reduce margins. Australia is a major market for A2 Platinum infant formula and liquid milk for the NZ-domiciled company.
Third-quarter sales volumes increased because of incoming regulatory changes in China but that effect is expected to balance out in the fourth quarter.
A2 said recent increases in dairy prices, as reflected in Global Dairy Trade figures, will not have a significant impact on this year’s margins but are likely to do so next financial year.
Second-half initiatives for the group include the launch in Australia and China via cross-border e-commerce of A2 Smart Nutritionals, a fortified, powdered, milk drink for children aged four to 12 years.
The number of Mother and Baby Stores distributing A2 products in China increased to 13,600 on March 31 from 12,250 at the end of December.
US distribution of A2 liquid milk increased to 12,700 stores at the end of March from 10,000 on December 3, and 6000 in June last year.
Marketing investment will increase again next financial year, A2 said.
