The overwhelming demand for infant formula that is leaving many supermarket shelves bare has driven an 80-fold surge in profit for a2 Milk.
China's rising appetite for high quality health products has caused widespread shortages of formula, and a2 admits it has struggled to keep up.
"We haven't been able to meet demand because the reality is demand exceeded our expectations," a2 Milk chief executive Geoffrey Babidge told AAP.
The milk producer was particularly stretched in the first four months of the financial year, prompting it to ask its supplier, Synlait Milk, to boost production.
"Whether we fully meet the demand in Australia and China is yet to be seen because we haven't had the product available to be able to meet all orders," Mr Babidge said.
"It's a good position to be in."
The company's net profit soared to $NZ10.1 million ($A9.34 million) in the six months to December, up from $NZ125,000 a year ago.
It has once again upgraded its full year forecasts, expecting earnings in the range of $NZ45 million to $NZ49 million, compared to the previous year's $NZ2.5 million.
Shares in a2 gained five cents, or 2.7 per cent, to $1.925, well above the 55.5 cents they were valued at when a2 listed on the Australian market in March 2015.
The company has been reinvesting profit rather than pay dividends to shareholders, however the current financial success could change that.
"It will be something that the board will reflect on now that the financial position of the company has been ramped up," Mr Babidge said.
CHINESE DEMAND SENDS A2 MILK'S PROFIT SOARING
* Net profit of $NZ10.1m, up from $NZ125,000
* Revenue up 86 pct to $NZ139.1m
* No dividend
Share
