Synlait milk being produced. Photo: Supplied/ Synlait
Dairy company Synlait is expecting a return to profitability after a long period of uncertainty which saw the company fighting for survival and rescued by its major shareholders.
It said the improvement was driven by new business driving growth in advanced nutrition products, a strong performance in the ingredients business and cost control.
Synlait acting chief executive Tim Carter said the company had lifted productivity and performance in the past six months.
"Today's announcement demonstrates the huge progress being made and, while we cannot take our foot off the pedal, we are pleased to announce we expect to return to profitability at our upcoming half year result," Carter said.
Synlait provided guidance for its underlying profit to be in the range of $58 million to $63m, compared to $19.9m a year ago.
Last year, the company posted a half-year bottomline loss of $70m.
Friday's announcement signalled a turnaround in fortunes for Synlait after a difficult period.
In September, Synlait shareholders voted overwhelmingly to approve a range of measures to towards restoring its finances and saving the debt-laden company.
It received financial support from its two biggest shareholders - China's Bright Food, and NZX-listed infant formula exporter and key Synlait customer A2 Milk.
Synlait also announced new farmer incentives to secure its milk supply.
"Farmers are an important backbone to our business. To further recognise that, we have increased our commitment to existing and new South Island suppliers with additional premiums in place for each of the following three seasons. We are confident this will secure our milk supply, which is critical to our future," Carter said.
The premiums announced were on top of those announced in September.
Synlait said it would release it 2025 half-year results on 24 March.
