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Highlights:
- Dairy manufacturer, Synlait has increased the forecast base milk price for the season 2022/ 2023.
- The forecast milk price is now NZ$9.50/kgMS for the 2022/23 season.
- Shares of Synlait were tad down during early trading hours on Wednesday.
New Zealand-based dairy manufacturer, Synlait Milk Limited (ASX:SM1), on Wednesday, shared that the company has increased its forecast milk price for the 2022/ 2023 season.
Synlait was established in 2000. It is a dual-listed company with listings on New Zealand’s Exchange (NZX) and Australian Securities Exchange (ASX). This dairy company is focused on supplying dairy products to nutrition and milk-based health companies.
The company combines expert farming and state-of-the-art processing to deliver a range of nutritional dairy products to its global customers.
Share performance of Synlait
At 10:15 AM AEST, the shares of Synlait were spotted trading 0.69% lower from its previous close to AU$2.88 apiece. Including today’s fall, the shares have dipped by more than 7% in the last month. In six months, the share price dropped by approximately 11%, and in 12 months, the shares fell by more than 17%.
Today (6 July 2022), the shares were in line with its benchmark index, ASX 200 Consumer Staples (INDEX:XSJ), which was down by 0.03% around the same time.
What is the updated forecast milk price?
Image source: © Awcnz62 | Megapixl.com
Through the ASX-announcement, Synlait informed the market that it has increased the forecast milk price from NZ$9.00/kgMS (per kilogram of milk solids) to NZ$9.50/kgMS for the season 2022 / 2023.
According to today’s release, Synlait has not announced any change to the forecast base milk price for the season 2021/ 2022. Reportedly, it remains at NZ$9.30/kgMS.
On 31 May 2022, the company reduced the milk price forecast for season 2021/ 2022 from NZ$9.60/kgMS to NZ$9.30/kgMS. The forecast was decreased at that time because the dairy commodity prices fell over the past two months.
Management commentary
On the development, Grant Watson, CEO, Synlait, commented that this forecast milk price is a balanced forecast considering the current dairy commodity prices and the lift reflects an improved outlook for 2022/23 dairy commodity prices, following the recent recovery in pricing, and the current strength of the US dollar.
Financial performance of Synlait
In April 2022, the company shared the half-yearly results, ending on 31 January 2022. The company delivered a strong set of numbers during these six months.
During the period, net profit after tax (NPAT) jumped to NZ$27.9 million, up by a whopping 338% on prior corresponding period (pcp). EBITDA increased by 45% on pcp to NZ$68.4 million. Operating cash flows were up 269% on pcp to NZ$117.3 million. Revenue of NZ$790.6 million was recorded, up by 19% on pcp.
