a2 milk company (ASX:A2M) has revised its earnings forecast upward for fiscal 2025 and introduced its first dividend policy, marking a milestone in the company’s history.

Year-to-date trading has exceeded expectations due to increased sales of external raw materials at the company’s MVM facility. This performance can be attributed to higher global dairy trade prices, currency fluctuations, and favorable product mix. As a result, a2 Milk now expects fiscal 2025 sales growth to be mid-to-high single digits, compared to its previous mid-single digit growth outlook. However, EBITDA margin is expected to remain at roughly the same level as FY24, declining in the first half and improving in the second half.

The newly introduced dividend policy targets a payout ratio of 60% to 80% of normalized net profit after tax. The first interim dividend, scheduled for February 2025, is likely to reflect the lower end of this range.

David Bortolusi, Managing Director and CEO, said: “To reward our shareholders for their support over the years and to reflect the significant progress we have made since announcing our new growth strategy in 2021, we are pleased to announce that A2 Milk・I am pleased to be able to introduce the company’s first dividend policy.”

Subsequent dividends will be declared semi-annually in February and August, subject to board approval and market conditions. The Company also intends to make imputed and forthright dividends to the extent possible within available credits.

On Friday, the stock rose 13.31% to close at $5.45 on the news.