Milk | Synlait Milk forecasts higher earnings despite drop in annual profit

New Zealand’s Synlait Milk reported a 9 percent drop in annual profit on 28 September, but forecasts strong underlying core earnings for 2021 based on its core infant and lactoferrin business.

Synlait, which is part-owned by a2 Milk Company did not provide any profit figure for its fiscal 2021 guidance, but said it was targeting a “slight improvement on fiscal 2020”.

Reuters reports that the diary firm also increased its milk price forecast for the 2020-2021 season to NZ$6.40 per kg of milk solids (kgMS), up from its previous estimate of NZ$6.00 kgMS.

“While it is still early in the season, and commodity prices remain volatile, this reflects growing confidence in the season ahead,” the company said in a statement.

Synalit said that while global uncertainty continues regarding the coronavirus outbreak, it does not expect any disruption to manufacturing or demand for its ingredient and lactoferrin business.

Net profit after tax for the 12 months to 31 July came in at NZ$75.2 million ($49.15 million), down from NZ$82.2 million a year ago, due to higher investment made in new facilities and acquisitions over the past two years.

The company added that it was in the process of finalising a long-term supply agreement with a new, multinational customer for packaged products which is expected to have a positive impact on its earnings from fiscal 2023.

($1 = 1.5300 New Zealand dollars).

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Milk, Synlait

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