Canterbury-based dairy company Synlait Milk has reported a slightly higher first-half profit after a lift in margins and infant formula volumes, but cast doubt on whether it will sustain its forecast pay-outs.
Its net profit rose 4 percent - to $10.6 million - in the six months ended January, compared with the previous period.
Revenue rose 35 percent, to $288.7m.
Managing director John Penno said business had picked up since the start of the year.
"We have seen our infant formula business return to strong growth since 31 January and expect this to continue into 2018. We believe this will generate a modest profit improvement on our 2016 [result]."
Synlait said one-off costs, such as dual listing on the Australian stock exchange, and the costs of onerous contracts, affected the result. Leaving them aside would have lifted the underlying profit.
It said global commodity prices remained volatile. Because of this, its final pay-out level of $6.25 a kilogram of milk solids was in doubt.
"At this point, commodity prices are very unlikely to support $6.25 kgMS and, if the current trend continues, New Zealand's farm gate milk price may finish below $6.00 kgMS," it said in a commentary to its results.