Synlait Milk Ltd (ASX: SM1) released its 2018 financial results to the market today revealing a 89% rise in net profit.
Synlait Milk is a New Zealand-based dairy processing company, it is the exclusive manufacturer of infant formula for A2 Milk Company Ltd (ASX: A2M) for the Australian, New Zealand and Chinese markets.
Synlait results:
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Here are some of the highlights from the result, all in New Zealand dollars:
- Total revenue grew by 15.8% to $879 million
- EBITDA grew by 56% to $138.6 million (click here to learn what EBITDA is)
- Net profit grew by 89% to $74.6 million
Synlait said that profit growth was mostly driven by an 89% increase in consumer packaged infant formula sales volume, which is higher margin.
Finished goods inventory increased by $55.1 million to $122.6 million, this buildup is to meet expected infant formula sales in FY19.
Synlait Chairman Graeme Milne said, “This has been a milestone year for Synlait as we grew both in capability and capacity.”
The dairy processor also announced it has entered into a conditional agreement to purchase select Talbot Forest Cheese assets including property, plant and equipment at a new 12,000 MT Temuka site, the consumer cheese brand and customer relationships.
The Synlait share price is down 5.7% in early trade according to Google Finance.
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