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

 

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

It's Spark Now:
Why Telecom Wanted To Change

New Zealand led the world when Chorus demerged from Telecom. It gave us a telecommunications industry structure where the network is completely separated from the products and services it delivers. The changes brought about a new market dynamic and it dramatically changed Telecom’s role. More>>

ALSO:

Glass Half Empty: Dairy Prices Fall To Lowest Since 2012

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news