After predicting a $75 million profit for this financial year at its outset, Synlait now expects to break even and is looking to keep costs under control to weather the headwinds.
The lack of international travel has hit sales of a2 Milk pretty hard and the other channels to market haven’t picked up any slack.
High farm gate milk prices are also having a negative effect on the balance sheet.
Back in January market analysts opined that the daigou trade was a great option for emerging businesses, but a mature outfit should perhaps be looking for a more direct path to consumers.
Synlait’s at the tail end of its investment phase, has an excellent sustainability model for its farmers and a great product.
Its leadership is confident it’ll emerge from this covid-induced coma better than ever.
It’ll need to, for its farmers and its shareholders.
Bryan Gibson
Synlait ponders lack of profit
Synlait may not make a profit this financial year because of sharply reduced orders from a2 Milk Company for packaged infant formula, rising dairy commodity prices and global shipping delays.
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