Dairy products maker Synlait Milk <SML.NZ> on Tuesday warned of flat to lower profit in fiscal 2021 due to weak demand for consumer-packaged infant formula, walking back on its September prediction of a better performance.
Synlait, which is part-owned by a2 Milk Company <ATM.NZ>. said product demand was likely to be weak in the first half of fiscal 2021, but could improve after that as existing stocks clear.
"Against this, we now expect to be at or slightly below the fiscal 2020 net profit after tax result for fiscal 2021," the company said in a statement.
In September, it had forecast a "slight improvement on fiscal 2020", driven by demand for its ingredient and lactoferrin business.
The dairy company warned the guidance was subject to the unpredictable effects of the COVID-19 outbreak, with consumer behaviour, channel dynamics and supply-chain disruptions all subject to change.
Synlait also launched a NZ$200 million ($136.58 million) share placement and purchase plan to raise funds for processing and packaging equipment as well as to provide extra balance sheet headroom to navigate the pandemic-led uncertainty.
(Reporting by Rashmi Ashok in Bengaluru; Editing by Arun Koyyur)
