Announcement

FLLYR: SML: Synlait Milk posts $11.5 million NPAT for FY2013 10:19a.m. 
SML  
24/09/2013 10:19  
FLLYR  
 
REL: 1019 HRS Synlait Milk Limited (NS)  
 
FLLYR: SML: Synlait Milk posts $11.5 million NPAT for FY2013  
 
Synlait Milk posted an $11.5 million net profit after tax for the year ending  
31 July 2013, an increase of $7.1 million on FY2012 and ahead of its  
prospective financial information ("PFI") forecast of $10.8 million.  
 
The Company had revenue of $420 million in FY2013, an increase of 11.5%  
compared to $377 for FY2012 driven largely by increased sales volumes.  
 
Synlait Milk Managing Director Dr John Penno said the Company made positive  
steps forward in all areas of its business relative to FY2012.  
 
"The financial results we achieved in FY2013 are in line with the PFI  
forecast and represent an improvement in financial performance compared to  
FY2012. Profit targets were achieved due to margin growth from increased  
sales across our value added products and despite revenue being slightly  
behind target due to lower than expected infant formula sales.  
 
"We remain confident of meeting our long term objectives for our infant  
formula and nutritionals business despite missing volume targets in FY2013  
primarily due to market disruption caused by Chinese regulatory changes at  
the end of the financial year. We are well positioned to take advantage of  
new regulations taking place in China that focus on quality standards,  
product pricing as well as a consolidation of brands.  
 
"We are focused on our value added milk powder and nutritional powder  
business, and building a reputation for quality and technical excellence,"  
said Dr Penno.  
 
The company's milk volume grew to 46.8 million kg MS in FY2013 compared to 44  
million kg MS in FY2012 lifting manufactured volumes to 91,229 metric tonnes  
in FY2013 compared to 81,398 metric tonnes in FY2012.  
 
The Company paid its milk suppliers a total average milk price of $5.89 per  
kg MS.  
 
Dr Penno said the focus for Synlait Milk in FY2014 will be on continuing to  
achieve operational targets and on the execution of its growth initiative  
projects to support the development of its infant formula and nutritionals  
business. They include a lactoferrin plant, a blending and canning facility  
and extra warehousing.  
 
"Each of these growth projects is specifically designed to either enhance our  
value proposition and build volume with targeted infant formula and  
nutritional customers, or enable us to continue providing volume to our  
ingredient business customers as the infant formula and nutritional business  
grows.  
 
"Our customer and market development strategy is progressing to plan and over  
the last year we have signed supply agreements with a number of new infant  
formula and nutritional companies in China. We expect these relationships to  
develop along similar lines to the growth pattern we have enjoyed with Bright  
Dairy," said Dr Penno.  
 
In FY2013 the Company achieved a pre-tax return on capital employed of 13.1%.  
 
In relation to its dividend policy, Synlait Milk confirmed that with its  
present focus firmly on growing the Company, no dividend will be payable for  
the financial year ending 31 July 2013, nor for period ending 31 July 2014.  
This is consistent with statements made in the Investment Statement and  
Prospectus at the time of listing.  
End CA:00241482 For:SML Type:FLLYR Time:2013-09-24 10:19:52