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December 18, 2007 |
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A2 CORP: Reports NZ$1.63 Mil. Loss in Six Mos. Ended Sept. 30 A2 Corp. Ltd reported a Group pre-tax consolidated loss for the half year ended Sept. 30, 2007, of NZ$1,631,000, compared with NZ$2,340,000 in 2006. For the six months to Sept. 30, 2007, A2C recorded a 26.3% decrease in consolidated operating revenue to NZ$2.740 million compared to NZ$3.720 million for the same period last year. This was mainly due to the cessation of trading activities of A2 Australia Pty Limited on May 31, 2007, for which earnings were fully consolidated. A2 Dairy Product Australia Pty Limited, a 50% associate took over the Australian trading activities from June 1, 2007, with earnings now equity accounted. The trading loss of NZ$1,631 million includes the trading results of A2DP and A2C's United States associate entity, A2 Milk Company LLC, which forms part of the operating expenditure of the consolidated Group. Operating expenditure includes costs associated with the operations of A2DP (NZ$261,000), ongoing marketing and promotional costs (NZ$408,000), and our share of the deficit from A2 Milk USA (NZ$250,000). The Directors are comfortable with these levels of expenditure given the potential of the markets being developed. The Group Statement of Financial Position includes that of A2A on a consolidated basis. The Group now has net deficit of NZ$3,785,000 compared to net assets of approximately NZ$1,093,000 on Sept. 30, 2006. ATM continued to gain momentum over the previous six months in both its existing, as well as new, target markets. The most significant advances over the past six months have been: -- entering into a 50/50 joint venture in the Australian market; -- the launch of fresh milk in the mid-West of the United States of America; and -- the appointment of Lotte Milk as an exclusive licensee in South Korea to market fresh milk. As has been advised previously, the company is undertaking a review of strategic options relating in part to the need to raise capital. The results of this review have not been finalized, although it is expected that announcements around the next steps in this process will be made in early 2008. Reports for Industry and Geographical Segments In the half year period under review, the Group operated in New Zealand, Australia and the USA; and in two forms of business being the licensing of intellectual property pertaining to the production and marketing of a2 milk, and the procurement, production and sale of a2 milk. About A2 Corp. New Zealand-based A2 Corporation Ltd. -- http://www.a2corporation.com/ -- is engaged in the sale and production of beta-casein A2 milk products. The company owns and licenses intellectual property that enables the identification of cattle for the production and subsequent marketing of A2 Milk. a2 milk is naturally produced to contain maximum amounts of a milk protein variant that is associated by a number of studies with potential benefits in some individuals. A2 Corporation Ltd receives royalty income from sales of A2 Milk products and testing for A2 cattle, and shares in the profits or losses of associates and subsidiaries formed for those purposes. The company suffered at consecutive net losses of NZ$5.08 million and NZ$448,800 for the years ended March 31, 2007 and 2006, respectively. |
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