- Synlait Milk reported a net profit after tax of NZ$38.5 million, up 235% on previous year.
- Inventory reduction and increase in operating cashflow led to balance sheet returning to normal metrics, said Synlait.
- The company expects to begin commercial production for Synlait Pokeno’s multinational customer in early 2023.
Dairy manufacturer, Synlait Milk Limited (ASX:SM1) on Tuesday (27 September 2022) shared its full year results for the period on 31 July 2022 (FY22). The New Zealand-based company has posted a 21% rise in revenue and a 235% jump in its net profit after tax (NPAT) over the previous year.
Key highlights of FY22 performance
- During the financial year, Synlait’s revenue increased to NZ$1.66 billion, up 21% on the previous year.
- Net profit after tax is up NZ$67 million to NZ$38.5 million. The company had incurred a loss of NZ$28.5 million previous year.
- EBITDA reached NZ$129.1 million, and adjusted EBITDA reached NZ$117.2 million.
- Net debt dropped 29% to NZ$341.9 million.
- Operating cash flow increased by NZ$214.5 million to NZ$232.9 million.
- In these twelve months, the group has reported a gain of NZ$11.9 million through the sale and lease back of Auckland land and building.
John Penno, Synlait chair, commented on the development:
Full year 2023 guidance
The company expects that the performance of its food services and advanced nutrition will continue to build in the next financial year. It is expected that new multinational customers would improve asset utilisation and lift margins at Dunsandel and Pokeno.
Synlait expects that its consumer business will report a steady contribution.
The rebalancing of opening and closing raw material and finished inventory levels are expected to result in softer operational cash flows in comparison to FY22. The targeted debt to EBITDA ratio is 2.0x to 2.5x.
Synlait mentioned that FY23 guidance could be affected by several risks, such as a tight labour market, supply chain constraints and high inflation.
Forecasted average base milk price
Considering the strong demand for dairy and tight global milk production, Synlait has shared a forecast average milk price of NZ$9.50 per kgMS for the 2022/2023 season.
Share performance of Synlait
At 10:18 AM AEST, Synlait shares were spotted trading 3.47% lower at AU$3.06 per share. Meanwhile, the benchmark index, ASX 200 Consumer Staples was 0.15% down to 12,472.60 points (at 10:40 AM AEST).