(Reuters) - New Zealand's Synlait Milk SML.NZ on Monday reported a 9% drop in annual profit, but forecast strong underlying core earnings in fiscal 2021 driven by its core infant and lactoferrin businesses.
Synlait, which is part-owned by a2 Milk Company ATM.NZ did not provide any profit figure for its fiscal 2021 guidance, but said it was targeting a "slight improvement on fiscal 2020".
The dairy firm also increased its milk price forecast for the 2020-2021 season to NZ$6.40 per kg of milk solids (kgMS), up from its previous estimate of NZ$6.00 kgMS.
“While it is still early in the season, and commodity prices remain volatile, this reflects growing confidence in the season ahead,” the company said in a statement.
Synalit said that while global uncertainty continues regarding the coronavirus outbreak, it does not expect any disruption to manufacturing or demand for its ingredient and lactoferrin business.
Net profit after tax for the 12 months to July 31 came in at NZ$75.2 million ($49.15 million), down from NZ$82.2 million a year ago, due to higher investment made in new facilities and acquisitions over the past two years.
The company added that it was in the process of finalising a long-term supply agreement with a new, multinational customer for packaged products which is expected to have a positive impact on its earnings from fiscal 2023.
Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Alison Williams and Diane Craft
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