Synlait reports record profit

Synlait Milk has reported a half year net profit after tax of $40.7 million for the six months ending January 31.

This is compared with $10.6 million for the same period last year.

The Canterbury-based, Chinese minority owned company has carved out a niche with a range of nutritional products, including infant formula.

Synlait’s managing director and chief executive John Penno said the growth had been driven by increases in manufacture and sales of its highest margin products, as well as improved margins and earlier sales of its ingredients products.

Sales of canned infant formula had almost tripled from the same period last year, and it is the exclusive manufacturer for the a2 Milk Company in the Australian, New Zealand and Chinese markets.

Synlait recently announced it had conditionally bought 28 hectares of land in Pokeno, North Waikato, to build a $260m infant formula manufacturing plant. The land purchase will have to be approved by the Overseas Investment Office (OIO).

In the six months to January 31, Synlait had invested $34.5m in capital expenditure throughout New Zealand.

This included an Auckland blending and canning facility ($11.2m) and a new wetmix kitchen at Synlait Dunsandel ($18.4m). It also established a new research and development centre in Palmerston North. Net debt was $49.7m, down from $147m for the same period in 2017.