Synlait Milk’s first half profit drops 30 percent

Synlait Milk has reported a 30 percent fall in its first half profit as its costs rose despite higher revenue.

The dairy company's net profit for the six month ended January was $26.2 million, compared with $37.3 million the year before.

Revenue rose 19 percent, but its depreciation and financing costs offset that as the company expanded for future growth.

"Our core infant nutrition business continues to support our growth, with sales of consumer-packaged infant formula up 22 percent on the same period last year," the company said in a presentation.

The Canterbury-based Synlait makes infant formula for major shareholder, A2 Milk, but has been diversifying into fresh milk and other dairy consumer products for South Island supermarkets.

It's also expanded with a new processing plant in Pokeno, south of Auckland, and has just bought Dairyworks, which makes butter, cheese, and other dairy produce.

Synlait said there had been some hold-ups in deliveries, but it had noticed no material effect on its business from the Covid-19 virus.

It is forecasting a full year profit between $70m and $85m.

This article was originally published on RNZ and re-published with permission.

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