The company, based near Dunsandel, central Canterbury, has commented on a 2011-12 that started with the commissioning of its nutritional drier and included the production of its first commercial volumes of infant formula.
However, it was also a period in which it lost out to Fonterra in tying up supply in South Canterbury following the receivership of New Zealand Dairies Limited in Studholme.
Securing the right to take milk previously contracted to NZDL could have given Synlait about 30 suppliers and entrenched its position between Timaru and the Waitaki River.
It has reported a base milk price last season of $6.14/kgMS, autumn premiums of $0.01/kgMS, colostrum and other special milk payments of $0.04/kgMS, and winter milk premiums of $0.03/kgMS.
Synlait Milk chairman Graeme Milne said it had provided farmers with a solid payout which demonstrated the company’s “continued focus on ensuring we leave our farmers better off than their alternatives”.
The company has indicated it will announce a profit for the year at its annual general meeting on November 16.
“We are pleased with the profit achieved for the 2011-12 financial year given the volatile commodity and currency markets, and the challenges of operating a new plant,” Milne said.
Securing more milk supply for the coming season would be an important step as the company continued to grow its business. “So it’s pleasing to be able to offer solid returns like this to our supply partners while also meeting shareholder expectations.”
In June, BusinessDesk reported Synlait Milk made a net loss of $3.1 million in the 12 months ended July 31, 2011. That was smaller than the loss of $11.7m a year earlier, according to financial statements lodged with the Companies Office.
In that period to the end of July 2011 the processor lifted revenue 28% to $298.9m, though its gross profit dropped 11% to $21.1m in a year when international milk prices reached record highs.
Synlait Milk paid its suppliers $7.76/kgMS in the 2010-11 season, up from $6.31/kgMS year earlier. That exceeded Fonterra’s $7.60 payment and Open Country Dairy's $7.56 in the same period.
Synlait Milk is separate from Synlait Farms, which is a supplier to the processing business.
Tatua $8.10/kgMS, retaining 58c.
Fonterra $6.08/kgMS, dividend of 32c.
Westland Milk Products $6.14kg/MS (unconfirmed).