a2 Milk has upped its profit guidance on strong infant formula sales

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The a2 Milk Company, reporting continuing strong sales of its infant formula in China and Australia, today revised higher its annual forecasts.

The company, which makes a2 Platinum infant formula, says revenue is now forecast to be $NZ545 million ($A518 million) for the 2017 financial year, a rise of $NZ20 million ($A19 million) on the previous update.

The company says it has been working closely with its infant formula manufacturing partner, Synlait Milk, to increase production for the rest of 2017.

a2 Milk also expects to spend more on marketing, mainly in China.

“Marketing expenditure in the second half is now expected to be approximately $NZ10 million higher than the first half of the 2017 financial year,” the company said in a trading update.

The company posted a profit of $NZ39.4 million ($A37.4 million) in the six months to December, up 290%. Total revenue for the ASX-listed New Zealand company was up 84% to $NZ256.1 million ($A243.4 million).

a2 Milk’s rising sales are a contrast to Bellamy’s, which says sales have been disrupted due to regulatory changes in China.

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