Chinese baby food maker Synutra has swung into the red during its fiscal fourth quarter due to the fall-out of last year’s melamine contamination scandal.

Synutra booked a net loss of US$17.2m for the three months to 31 March compared to net income of $19.3m.

Sales slumped by 32.8% to $72.7m due to the link between Synutra and last autumn’s melamine scandal that caused thousands of infants to fall sick and the deaths of at least six babies.

Amid the scandal, batches of Synutra’s U-Smart products were discovered to be contaminated with melamine, which caused sales to tumble.

Across the full fiscal year, Synutra incurred a net loss of US$100.6m, with sales down 13.7% to US$312.5m.

Chairman and CEO Liang Zhang admitted the last 12 months had been the “most painful and difficult “ in the company’s history.

However, the Synutra boss insisted its fourth-quarter results showed the company was making “good progress”.

“The rising sales and narrowing losses demonstrated in our sequential results make us increasingly confident that we can return to profitability and financial stability by the end of the current fiscal year, which ends on 31 March, 2010.”

Compared to Synutra’s fiscal third quarter, sales soared by 311% during its fourth quarter, while its losses narrowed.