Mid Canterbury milk processor Synlait Milk has recorded
an after-tax net profit of $11.5 million for the year to July,
up $7.1 million on the previous year.
The result was also ahead of the company's prospective
financial information forecast of $10.8 million.
Earnings before interest, tax, depreciation and amortisation
(ebitda) were up 74.2% from $22.1 million to $38.5 million,
while revenue was up 11.5% from $376.8 million to $420
Profit targets were achieved because of margin growth from
increased sales across the company's value-added products and
despite revenue being slightly behind target because of lower
than expected infant formula sales, managing director Dr John
The company, which was launched in 2005, remained confident
of meeting its long-term objectives for its infant formula
and nutritionals business despite missing volume targets,
primarily because of market disruption caused by Chinese
regulatory changes at the end of the financial year.
''We are well positioned to take advantage of new regulations
taking place in China that focus on quality standards,
product pricing as well as a consolidation of brands,'' Dr
A total average milk price of $5.89 per kg ms was paid to the
company's milk suppliers.
The focus in the 2014 year would be on continuing to achieve
operational targets and on the execution of its growth
initiative projects to support the development of its infant
formula and nutritionals business.
Those projects included a lactoferrin plant and a blending
and canning facility.
Building of the lactoferrin plant was under way and it was
due to be commissioned in January next year, while the
blending and canning facility was due to be commissioned
ahead of schedule in June next year.
With its present focus ''firmly on growing the company'', no
dividend would be paid for the year to July this year, or for
the year ending July 2014.
The overall milk supply was up 6.2% on the previous year at
46,768kg ms, while contracted milk supply was up 12% at
The company completed its initial public offering in July.
FrieslandCampina Investments Holding BV, a subsidiary of
Dutch dairy giant Royal FrieslandCampina, took a 7.5%
shareholding, while Chinese company Bright Dairy and Food Co
Ltd dropped its shareholding to 39.12%.
• Fonterra will announce its full-year result today.