30 May 2014

Synlait blames lower forecast on kiwi

2:51 pm on 30 May 2014

Synlait Milk says a high and volatile New Zealand dollar is partly behind it slashing its profit forecast by up to $7.5 million.

The listed dairy company says it now expects its net profit to be between $17.5 million and $22.5 million for the year ended July.

That's down from the previous forecast of between $25 million and $30 million.

The new forecast also signals a risk the company won't meet its prospectus forecast of $19.8 million.

Managing director John Penno said the company had taken a conservative view.

He said the dollar had been very high in the last quarter and there was not much the company could do with all its products exported, except give clear signals to the market.

Mr Penno said another factor was the older forecast relying on its mix of products remaining favourable for the entire year.

He said they had become a lot less favourable in the second half.

Synlait's forecast milk price for the 2014 financial year is now $8.20 to $8.40 per kilogram of milk solids.

The new season forecast price for the 2015 financial year is $7.00.