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April 22 (Reuters) - New Zealand's a2 Milk Co Ltd ATM.NZ on Wednesday raised the outlook for its full-year core earnings margin amid a surge in consumer stockpiling during the coronavirus outbreak.
The dairy producer's lift to earnings expectations comes as food retailers across the world have benefited from panic-driven hoarding of essentials ahead of lockdowns to curtail the pandemic's spread. Milk forecast full-year 2020 earnings before interest, tax, depreciation and amortization (EBITDA) margin between 31% and 32%, from the previous range of 29% to 30% it had forecast in February.
As customers stockpiled the company's products, particularly infant nutrition products sold in Australia and China, a2 Milk said revenue for the three months ended March 31 was above expectations.
The surge in sales was mostly through online and reseller channels, the company said.
A2 Milk's revenue from China, accounted for in U.S. dollars, was also boosted by a significant depreciation of the New Zealand dollar against the U.S. dollar during the quarter.
These two factors, combined with lower-than-expected costs and a delay in planned recruitment due to the virus outbreak boosted the company's results.
"We are unable to estimate the timing and extent to which pantry stocking may unwind," the Auckland-based company said. "It is unlikely that these factors will be sustained as these unprecedented circumstances begin to unwind."
The company added that despite uncertainty posed by the coronavirus pandemic, it expects annual revenue in the range of NZ$1.70 billion to NZ$1.75 billion.