Synlait Milk has issued a profit warning for the New Zealand dairy and infant-formula firm’s half-year results.
Without providing a figure, Synlait said net profit after tax will be down on last year in the first six months of its 2023 fiscal year. However, its guidance for the full year remains unchanged due to an increase in volumes across the advanced nutrition and consumer categories and the out-of-home channel.
In September, Synlait revealed advanced nutrition, consumer, ingredients and foodservice would form the core of its business following a strategy review earlier in the year. At the same time, the company reported a return to profit, notching up NZD38.5m (US$24.2m today) for the 2022 financial year, compared to a NZD28.5m loss in the corresponding period.
For the first half of that fiscal year, to 31 January 2022, the business reported net profit after tax of NZD27.9m, up more than 300%.
Synlait cited a range of factors for its first-half profit warning.
Delayed shipments of ingredients due to the company’s SAP software implementation, which hit volumes by around 45%, and lower milk supply in the opening four months of the fiscal year.
The company also blamed a 40% drop in lactoferrin volumes due to “sales phasing”, although lactoferrin margins are expected to be “equal or better for FY-23”. And “increased costs due to SAP stabilisation activities, supply chain challenges and inflation”.
Synlait added it plans to issue full-year profit guidance when the first-half results are published on 27 March.
Actual outlook figures for the 2023 financial year have not previously been specified other than Synlait saying it “intends to exit FY-23 and enter FY-24 with a similar level of profitability experienced before FY-21”.
For the 12 months ended on 31 July, 2020, Synlait reported a net profit after tax of NZD75.2m.
