The A2 Milk Company Ltd (ASX: A2M) share price is starting the week in a positive fashion.

In morning trade, the infant formula company's shares are up 15% to $6.85.

This follows the release of its half year results before the market open.

A2 Milk share price higher on results day

• Group revenue up 10.1% to NZ$893.8 million
• EBITDA up 5% to NZ$118.9 million
• Net profit after tax up 7.6% to NZ$91.7 million
• Inaugural dividend of 8.5 NZ cents per share
• Cash balance up 28% to NZ$1,014 million

What happened during the first half?

For the six months ended 31 December, A2 Milk posted a 10.1% increase in revenue to NZ$893.8 million.

Management advised that this reflects continued growth in the China & Other Asia segment, supported by double-digit growth in the USA segment and a big increase in Mataura Valley Milk (MVM) revenue, partly offset by small decrease in ANZ revenue due to a further decline in the Daigou channel.

Total infant formula sales grew 7.2% led by English label, which was up 13%. This was driven by a strong performance within the Cross-border e-Commerce and Offline-to-Online (CBEC and O2O) channels supported by English label market growth, whilst China label sales were 2% higher, impacted by temporary supply constraints that were resolved during the half.

Liquid milk sales grew 12.1%, with ANZ up 11.2% and USA up 13.4%. This reflects growth in the core portfolio and recent innovation.

EBITDA increased 5% to NZ$118.9 million for the half due to a softer EBITDA margin. However, this was consistent with its previous guidance and reflects the impact of temporary supply constraints and incremental airfreight costs.

On the bottom line, A2 Milk reported a 7.6% increase in net profit after tax to NZ$91.7 million.

And with the company's cash balance ballooning to NZ$1,014 million, A2 Milk elected to pay its first ever dividend. It has declared a fully franked interim dividend of 8.5 NZ cents per share.

Commenting on its result and its dividend, A2 Milk's managing director and CEO, David Bortolussi, said:

Execution of our growth strategy has resulted in another period of strong operational and financial performance. Our strong first half results and momentum going into the second half have resulted in an upgrade to our FY25 revenue and earnings guidance.

We are pleased to declare our first ever dividend, recognising the substantial progress we have made as a business and rewarding our shareholders for their continued support. In our infant milk formula business in China, we are a top-5 player and one of the best performing brands, growing sales by 7% in a market that declined 6%.

Outlook

Also giving the A2 Milk share price a boost today is news that management has upgraded its guidance for FY 2025.

It is now expecting revenue growth of low to mid double-digit growth. This is up from its previous guidance of mid to high single-digit growth.

In addition, A2 Milk's EBITDA margin is now expected to be slightly up year on year. Whereas it was previously guiding to it being broadly in line.