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

 


Synlait cuts FY profit forecast on high kiwi, falling prices

Synlait cuts full-year profit forecast on high kiwi, falling dairy price

By Suze Metherell

May 30 (BusinessDesk) - Synlait Milk, the dairy processor which counts China’s Bright Dairy as a cornerstone shareholder, cut its full-year earning forecast for the second time this year as a strong currency and an unfavourable product mix weighs on the exporter.

The Rakaia-based company said profit will be $17.5 million to $22.5 million in the year ending July 31, down from a March estimate of $25 million and, 30 million, and a January forecast of $30 million to $35 million. Its prospectus forecast profit of $19.8 million.

"A reduced advantage from a favourable product mix in the second half of the year, and a consistently high New Zealand foreign exchange rate has resulted in a reduction in forecast net profit after tax of approximately $7.5 million for the financial year," the company said.

Synlait lowered the bottom end of its forecast milk payment to suppliers for the full-year to $8.20 to $8.40 per kilogram of milk solids from a previous forecast of $8.30 to $8.40/kgMS, and said it expects to pay a lower price for the upcoming 2015 season of $7.00/kgMS, matching the forecast made earlier this week by its the nation's dominant dairy company Fonterra Cooperative Group.

In January, Synlait said it expected sales of baby formula to fall below its 10,000 metric tonne target this year because stricter Chinese regulations had caused “considerable disruption” in that market. Earlier this month, the dairy exporter missed out in the first round of approvals under new Chinese regulations, preventing it from exporting infant formula to that market. The dairy processor is spending $21 million expanding its laboratory and administrative facilities, in part to increase its testing capabilities.

The shares last traded on the New Zealand All Ordinaries Index at $3.40, valuing the company at $497.6 million, and 55 percent above its $2.20 listing price last July. The shares climbed as high as $4.11 in mid-January.

The company expects to publish its full-year earnings on Sept. 24.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Negotiations Fail: Christchurch Convention Centre Build To Proceed Without PCNZ

After protracted negotiations, the government has ditched the construction consortium it picked to build Christchurch's replacement convention centre, which it now anticipates delivering at least two years behind the original schedule. More>>

ALSO:

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news