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

 


Synlait Milk lowers FY forecast on infant formula volumes

Synlait Milk lowers full-year forecast on below-target infant formula volumes

By Jonathan Underhill

March 27 (BusinessDesk) – Synlait Milk, whose shares are up 81 percent from its initial public offering, lowered its full-year profit forecast, saying regulatory changes in China and Fonterra Cooperative Group’s whey protein recall are denting volumes of infant formula and nutritional products.

Full-year profit will be in a range of $25 million to $30 million, down from the $30 million-to-$35 million estimate it gave in January. The projection is still well ahead of its prospectus forecast of $19.8 million.

The Rakaia-based company lowered its guidance while announcing a 79 percent jump in first-half profit to $12.1 million as sales rose 62 percent to $284.9 million. Its profit margin rose to $919 per metric tonne in the six months ended Jan. 31 from $751 in full-year 2013.

“Despite it being clear that we will not meet our infant formula and nutritional volume targets for this financial year, we remain confident of meeting our long-term objectives,” managing director John Penno said in a statement.

“With a favourable product mix and an increasing amount of product sold into value-added applications we expect our milk powder and cream products business to outperform our initial public offer projections in FY2014,” he said.

The shares last traded at $3.99, valuing the company at about $584 million. The company is 39 percent owned by China’s Bright Dairy & Food. It won’t pay a dividend.

Synlait had warned in January that it may fall short of its target of selling 10,000 metric tonnes of infant formula and nutritional products in China because of disruptions in that market caused by increased regulation. Full-year infant formula sales are now expected to be similar to 2013 and the company took a pretax provision against infant and nutritional inventories of $5.8 million.

Overall sales volumes for ingredients rose 4.1 percent to 40,503 metric tonnes in the first half while nutritional volumes jumped about 90 percent to 3,005 tonnes. Total milk procurement rose 7 percent to 31,547 kilograms of milk solids.

The company plans to bring forward some planned capital spending and has increased the capacity of its second infant formula and nutritional spray drier by 25 percent, lifting the cost of the project by $31.5 million to $135 million including site work for a fourth spray drier, it said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

OceanaGold: Man Killed In Waihi Mine Accident

A 29-year-old man had died following a work place accident at OceanaGold mine, Waihi last night. The man was killed after the front end loader he was in rolled down a slope. The accident happened at approximately 6.30pm on Thursday night. More>>

ALSO:

Constructing Consent: Annual Housing Consents Highest In Over A Decade

More than 29,000 new homes gained building consent in the year to June 2016, up 16 percent from the previous June year, Statistics New Zealand said today. More>>

ALSO:

War Against Weevil For Future Peas: “No Peas, No Weevil” Ban Now In Place In Wairarapa

The Ministry for Primary Industries (MPI) has today placed a ban on growing peas within a specified area and placed controls on moving pea material (seed and untreated pea straw) within, in and out of this area for the next 2 years. More>>

ALSO:

Wood Producers: Crisis In New Zealand Log Supply

New Zealand wood processing leaders held a hui with senior government officials and political leaders in Whangarei yesterday to assess the acute log supply shortage to local mills in Northland. More>>

Consents And Taxes: Trustpower 'Very Disappointed' With Judgement

Trustpower is "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers. More>>

ALSO:

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news