The two groups began a manufacturing partnership in 2012, but a blame game over Synlait’s profit hole has caused serious angst.
A hefty profit downgrade by Synlait Milk in NZ prompted a statement by its large infant formula customer the a2Milk Company saying that its own profit forecasts are still intact.
The a2 Milk Company, which has taken investors on a rollercoaster ride where its shares were as high as $19.83 in June 2020 and then slipped to $4 in May last year, owns nearly 20 per cent of New Zealand-based Synlait, which supplies its infant formula.A2 Milk shares dropped 5 per cent on the ASX on Wednesday after it warned that its own revenue growth was likely to be at the low end of guidance, although it held firm on its own previous profit forecasts.
Analysts have also been expecting that Synlait could benefit from extra volumes it will produce for a mystery customer it has been referring to as “Customer S”. Most believe it is United States nutrition company Abbott.
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