Synlait Milk Posts $6.3 Million Net Profit

MEDIA RELEASE

Embargoed until 5 December 2012

Synlait Milk Posts $6.3 Million Net Profit for 2012 Financial Year

Canterbury milk nutrition company Synlait Milk posted a $6.3 million profit after tax for the year ending 31 July 2012.

The company had a turnover of $377 million in its fourth year of operation, an increase of $78 million on the previous year, driven primarily by substantial growth in the company’s milk powder ingredients business.

Chief Executive, Dr John Penno says the development of the company’s new adult and infant nutritionals business holds exciting prospects for the future, however it has been its value added and consumer ready milk powders business that delivered the strong financial result last year.

“We were very pleased to achieve a solid profit while providing a very competitive milk price to our milk supply partners. It is even more pleasing that this came about in a year when our volume of ingredient powders has grown by 50 percent, and we were commissioning our new infant formula capable drier,” said Dr Penno.

The company paid its milk suppliers a total average milk price of $6.22/kg MS.

The company’s milk volume grew from 343 million litres in 2011 to 498 million litres in 2012, with 40 new farms being contracted for supply. The additional milk processed lifted manufactured volumes from 54,414 metric tonnes in 2011 to 81,398 metric tonnes in 2012.

In 2012 Synlait Milk expanded its operation to include a purpose built infant formula plant. The company also upgraded its existing spray drier to allow for the production of growing up milk powders, and its special milks drier was upgraded to produce high-value milk protein concentrate.

“We remain committed to our strategy of developing our value-added and nutritional milk powder business, and building a reputation for quality and technical excellence. Current performance confirms our view that the margins provided in these demanding market segments will be critical to Synlait Milk’s future,”

“The company is now positioned at the premium end of the highest value milk protein markets. Our partnerships with our customers, milk suppliers, and staff continue to mature, and our focus on continuous improvement and quality is yielding tangible performance improvements. This has created the solid business platform that we need to build our value-added business from,” said Dr Penno.

Dr Penno says that while Synlait Milk is firmly focused on further improving its performance, it is also considering future requirements, primarily being driven by market demand. This includes planned investment in consumer packaging facilities and, in time, increased scale through additional processing.

ENDS

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