A Synlait milk truck. Photo: Synlait/supplied
- Synlait Milk has posted a modest first half profit
- Revenue and operating earnings higher, costs and debt lower
- Holds milk payout forecast of $10/kg milk solids
Dairy company Synlait Milk has posted a modest first half profit as a cash injection, debt reduction, cost cutting and improved sales put it on the road to recovery.
The Canterbury based company made a profit of $4.8 million compared to the previous year's $96.2m loss, which included significant one off losses.
Synlait needed an emergency loan and financial rescue package from its two largest shareholders to survive last year as it struggled with falling sales, a dispute with its biggest customer, and a debt mountain.
"Given the position Synlait was in 12 months ago, this return to profitability is a considerable commercial achievement," acting chief executive Tim Carter said.
"Today's result was delivered through a focus on getting the fundamentals of our operational performance right, seizing opportunities to deliver for customers, and continued cost control."
Synlait makes baby formula for A2 Milk for local and Chinese consumers, as well as a range of consumer dairy products through its Dairy Works subsidiary.
Revenue rose 16 percent to $917m, while its debt was reduced 29 percent to $392m.
The chairperson George Adams, credited with leading the rescue efforts, said the company has turned a financial and business corner.
"While we still have a lot of work to do, we know we are heading in the right direction. The focus now is to consistently deliver - every day, every week, every month, every quarter and every year."
However, the company was expecting to make slower progress on restoring its finances as it balanced various factors ahead of a refinancing of its bank facilities.
The company said many of its suppliers who had threatened to quit the company have changed their mind, and only a few had confirmed their exit, while new potential suppliers were looking to sign up.
