Chinese infant formula firm Synutra returned to profitability in its last financial year as it recovered from the impact of a food safety scandal in the previous 12 months.
Synutra yesterday (14 June) reported net income of US$16.7m for the year to the end of March. The year before the company booked a net loss of $40.1m after unsubstantiated claims were made that its products caused premature breast growth in three infant girls.
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Net sales climbed 37.8% to $342.5m, which Synutra said demonstrated its “sustained recovery” throughout the year.
Chairman and CEO Liang Zhang said it was the first year Synutra had generated a profit since the 2008 melamine crisis.
Four years ago, infant formula contaminated with the industrial chemical caused thousands of children to fall sick and at least six people to die. Amid the scandal, batches of Synutra products were found to contain melamine and the company’s sales slumped.
The Synutra chief said “quality and consumer confidence remain key issues within our industry” but added: “We believe our ability to regain sustained profitability after overcoming multiple industry challenges demonstrates the long term potential of Synutra.”
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