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

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news