A2 Milk says weak kiwi dollar helped first quarter sales

A2 Milk chief executive David Bortolussi. Photo / Supplied

A2 Milk said it had made a positive start to the year, with first quarter sales expected to be marginally ahead of plan thanks to the weaker NZ dollar.

A2 Milk is due to start a $150 million share buyback next week.

"By way of a trading update prior to commencing the buyback, the company has made a positive start to the year, with first quarter sales expected to be marginally ahead of plan primarily reflecting the benefit of favourable foreign exchange driven by depreciation of the New Zealand dollar," it said.

"Due to the currency impact on cost of sales and cost of doing business, notwithstanding the benefit to sales, first quarter 2023 EBITDA is expected to be in line with plan," the company said.

The company said risks to its outlook included Covid-19 impacts on supply chain, product registration process timing, volume impact of price increases, foreign exchange movements, cross-border trade, changes in the regulatory environment, and commodity prices.

"These risks could materially impact expected revenue and earnings outcomes," the company said.

A2 Milk said it plans to start its buyback on Wednesday and said it may run for up to 12 months.

The company may acquire up to 37.18 million ordinary shares through the NZX and ASX at the prevailing market price from time to time in that period.

A2 Milk's shares last traded at $6.11, down 5c, in a broadly weaker market.

The alternative dairy and infant formula company last month reported a 42 per cent jump in annual net profit to $114.7m, driven by strong growth in its infant formula business in China.

Revenue in the June year grew by 19.8 per cent to $1.44 billion.

The New Zealand dollar last traded at just over US57c, down from 64.5c in mid-August.