Photo: RNZ / Cosmo Kentish-Barnes
The South Island dairy company Synlait Milk is back in the black as its ingredients division saw higher than normal sales, while its major customer rebalanced inventory levels.
Key numbers for the 12 months ended July compared to a year ago:
- Net profit $38.5m vs $28.5m loss
- Revenue $1.66b vs $1.37b
- Total average payment $9.59 vs $7.82
- Forecast 2023 payout $9.50 per kilo of milk solids
Synlait chair John Penno said the past year was "an important period of refocusing".
"While rebuilding revenue, reducing unnecessary costs, releasing working capital, and decreasing capital expenditure, we have focused on building scale and capability in the highest returning segments available to the New Zealand dairy industry.
"Our ingredients business returned to its historical profitability, and our nutritionals business returned to growth, while we continued to invest in customer development across all business units."
The company made a $11.9 million one-off gain from the sale and lease-back of its Auckland land and building.
Synlait posted its largest ever loss in 2020/21 as it bore the cost of a sharp fall in orders for infant milk formula from its major customer A2 Milk.
Inventory rebalancing from A2 Milk meant its product mix was still heavily weighted to its ingredients business in 2021/22, Synlait said.
Gross profit for its ingredients business was up $43 million to $57.5m, while sales were up 5 percent.
Nutritionals sales volumes fell 2 percent, driven largely by A2 Milk adjusting its inventory levels.
But nutritionals gross profit was up by nearly two-thirds to $70m as it recovered manufacturing overheads as it increased production of infant formula base powders.
Nutritionals margins also benefited from cost cutting, the company said.
Chief executive Grant Watson said Synlait was well positioned as it entered the second year of its recovery.
"Seeing the outcomes of our financial and strategic reviews come to fruition sooner than expected in the face of a challenging trading environment has been pleasing.
"Continuing to strengthen our foundations over the next year will ensure we keep improving our financial performance for shareholders and continue making Synlait a great place to work for our team," Watson said.