Chinese infant formula maker Synutra has blamed a competitive promotional environment and unfavourable foreign exchange rates for a fall in nine month sales and profits.
The firm has now lowered its full year outlook to $375-$400m for net sales from $450-$500m and net income of $30-35m from $50-60m.
Net profit for the nine months ending 31 December fell to US$20.9m from $47.8m a year earlier. Operating profit was also lower at $46m compared with $57.2m
Sales declined to $278.9m from $303.7m.
Sales were impacted by a fall in Synutra’s nutritional foods arm where a decline was seen in the sales volume and average selling price in milk formula as well as a sales decline in the firm’s industrial arm.
For the third quarter sales were lower at $109.3m compared with $115.3m.
Operating income however was lifted by the lower cost of whole milk powder and grew to $20.6m from $19.2m.
But net profit fell on higher foreign exchange losses and income tax expenses to $12.3m from $17.9m.
In January, the firm’s CEO Liang Zhang expressed wishes to take the company private by acquiring all outstanding stock for US$5.91 a share. In an update from Friday (5 February), Synutra said it had appointed an independent financial advisor and legal counsel in connection with the proposal.