Synlait posts ‘solid result’ halfyear profit

SYNLAIT has posted a halfyear netprofit after tax of $37.3 million, 9.6% lower than the $41.3 million achieved in HY18.

In a statement, the company described it as a ‘‘solid result’’, with increased sales volumes achieved across its powders and cream and lactoferrin businesses.

Synlait processed 12.4% more milk in the period into 90,466 metric tonnes of product, a 10.5% increase on FY18.

While sales volumes of fully finished infant formula were slightly ahead of HY18, they were delivered at lower margins.

That was a result of the new pricing agreement entered into with The a2 Milk Company last July, as well as not having the benefit of the higher margin sales to Chinabased customers that Synlait enjoyed in HY18. Those brands were awaiting State Administration for Market Regulation registration, the statement said.

Nearly $200 million of capital expenditure was invested in the six months to January 31 as it progressed its four major growth projects.

The build of its new infantcapable manufacturing facility in Pokeno continued to be on track for commissioning for the 201920 milk season.

The $280 million investment in the Waikato would allow Synlait to meet customer demand while also eliminating its singlesite risk.

The $125 million build of the advanced liquid dairy packaging facility in Dunsandel, announced in early FY18 in conjunction with the Foodstuffs South Island supply agreement, was also on track.

At the end of last year, Synlait entered into a conditional agreement to acquire selected Talbot Forest Cheese assets. The acquisition was expected to be in the range of $35 million to $40 million.

The company had also just completed its $18 million expansion to its Dunsandel lactoferrin facility which had doubled itslactoferrin manufacturing capacity.