Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Synlait posts $6.3M maiden profit, likely to seek capital

Synlait posts $6.3M maiden profit, likely to seek more capital

Dec. 4 (BusinessDesk) – Powdered dairy products exporter Synlait Milk has turned in a maiden profit of $6.3 million for the year to July 31 and expects to seek fresh capital from its two shareholders as it pursues "further strongly profitable opportunities."

The Dunsandel-based processor added a further 20 supplier farms during the year and processed a total of 498 million litres of milk in the year, compared with 343 million litres the year before, after adding a third drying unit, allowing it to manufacture higher-value nutritional products.

After failing to attract New Zealand investors to a $150 million initial public offering in 2009, Synlait Milk is now 51 percent-owned by the Chinese firm Bright Dairy, with the remainder held by Synlait Ltd, a vehicle representing the company's founders.

"Operating cash flow at just under $30 million is pleasing and planned to continue to grow in the year ahead," said chairman Graeme Milne. "In order to maintain a prudent capital structure, it is likely that Synlait Milk will approach our two shareholders … within the next 12 months for further equity."

These include adding consumer packaging capability, although Synlait Milk continues to see its future as a supplier to rather than competitor of leading brand owners.

Total revenues for the year increased 26 percent to $377 million and the $6.3 million profit compared with a $3.1 million loss the previous year.

Lower prices for milk during the year under review affected selling prices, but also saw the total cost of milk purchased fall from $49.4 million a year earlier to $39.6 million in the last year.

Chief executive John Penno said the company had faced more challenges than it expected implementing a bespoke operational and reporting system, although "most of the problems" had been ironed out by year's end.

There were several areas identified "for business improvement by doing simple things better," Penno said.

"The development of the company’s new adult and infant nutritionals business holds exciting prospects for the future, however it has been its value added and consumer ready milk powders business that delivered the strong financial result last year," Penno said.

“We remain committed to our strategy of developing our value-added and nutritional milk powder business, and building a reputation for quality and technical excellence. Current performance confirms our view that the margins provided in these demanding market segments will be critical to Synlait Milk’s future,” he said.

“The company is now positioned at the premium end of the highest value milk protein markets," he said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news