Synlait shares take a hammering
Troubled milk processor Synlait's share price is taking a hammering as nervous investors offload their stakes.
Last year the company's half year result was $0.4 million. It says the big profit rise results from increased nutritional sales in canned infant formula.
"We're glad to deliver a solid result for the first half of FY16," says chairman Graeme Milne. "Our significant investment in customer and product development, people, plant and operating systems in recent years is beginning to transform our earnings.
"Our core strategy is to partner with leaders in the infant formula and adult nutrition industries. These half year results demonstrate the early success of this strategy and we're pleased with our pace of execution."
Nutritional product sales for the period were 7498 MT, a 155% increase on HY15's 2946 MT; this accounted for 16% of total sales volumes in HY16.
"The result we're expecting is an almost fourfold increase in canned infant formula sales in FY16, compared to FY15. Concurrently, by the end of FY16 we will have strengthened our balance sheet by restructuring our working capital requirements and repaying debt.
"This position provides a base for potential further capital expansion," says Milne.
Managing director John Penno highlights the success of Synlait's partnership with nutritional customer The a2 Milk Company.
"As the sole manufacturer of their fast growing a2 Platinum range of infant formula, it's a good example of a strong customer relationship providing a positive return to our bottom line," says Penno.
