Synutra lowers guidance on 9M sales, profit plunge - Just Food
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Synutra lowers guidance on 9M sales, profit plunge

09 Feb 2016

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.