It has cut its forecast after-tax profit to $15-$25 million, compared to last year’s $38.5m.

In December, Synlait reaffirmed its expectation of ending the year with a “similar level of profitability experienced before FY21”, which had been a net profit of $75.2m.

Chief executive Grant Watson said it was taking longer than expected to restore the company’s finances after the disruptions caused by the pandemic and the problems of its major customer, A2 Milk.

“It has become increasingly clear that our two-year recovery plan will now take three years. While underlying momentum is lifting, our full financial recovery will take longer than planned.”

The company is due to report its half year result on 27 March. and had already warned it would be down on a year ago.

Synlait shares dropped 6 percent after the announcement to a four-month low.

Watson said they disclosed their new forecast now rather than at the half-year result because the figure was outside the consensus of investment analysts.

He said the main factors causing the downgrade were lower demand and production for customers, lower volumes of milk being processed, weather, labour and other shortages, and general inflation pressures.

The company also had technology problems which affected its shipping of product, meaning it ended up with more stock.

Synlait’s business has been dominated by producing infant formula for A2 Milk, which in recent years has had difficulties in its major market China.

Watson said Synlait’s ingredients and consumer businesses were strong and product range was expanding.

“The focus of our leadership team remains on stabilising Synlait to ensure we have strong foundations to deliver sustainable and diversified growth across our customers, channels, categories, and geographies.”