A2 Milk's share price dropped sharply after the company reported a decline in first half earnings.
By late afternoon, the stock was down $1.61 or 14.4 per cent at $9.52.
The company earlier said its net profit dropped by 35 per cent to $120m in the first half due to Covid-19 disruption in the unofficial daigou trade into China, and the flow-on impact of that on cross-border e-commerce channels.
At an operating level, a2 Milk's EBITDA dropped by 32.2 per cent to $178.5m.
Revenue eased by 16 per cent to $677.4m, slightly better than its December guidance of $670m.
A2 Milk's EBITDA margin came to 26.4 per cent, a touch down on its guidance of 27 per cent.
Looking ahead, a2 Milk said it expected its revenue to come in at the bottom of a previously advised $1.4b to $1.55b range for the year to June.
Its EBITDA margin forecast for the year was pitched in a range of 24 to 26 per cent, down from its previously advised range of 26 to 29 per cent.
Inventory at the end of the six months came to $198.6m, $51.2 million higher than at the end of 2020, and the consequence of managing the uncertainties and complexities of Covid-19 and its impact on supply chains.
The alternative milk company, which has appointed David Bortolussi as its new chief executive to replace the outing Geoff Babidge, said it had been a challenging first half, with revenue falling by 16 per cent.
"This was driven by performance through the daigou and cross-border e-commerce (CBEC) channels being significantly impacted due to disruption resulting primarily from Covid-19 related issues," the company said.
"This was partially offset by another period of strong growth for China label infant nutrition products, with sales of $213.1m, an increase of 45.2 per cent."
Further growth in the liquid milk businesses in both Australia and the USA was achieved.
Australian sales were up 16.3 per cent to $86.9m.
Changes in the approach in the United States, focusing more on affordable premium pricing, resulted in sales increasing 22.0 per cent, driven by improved in-store sales in established stores as well as an expanded store footprint.
A2 Milk balance sheet remained in a strong position with no debt and a closing cash position of $774.6m.
The cash position was $79.5m lower than June 2020 due to negative operating cash flow, participation in the recent Synlait capital raising and the acquisition of the Kyvalley milk processing facility.