Synlait Milk, the NZX-listed dairy company, posted a record first-half net profit on increases in the manufacture and sales of high-margin products and its relationship with a2 Milk.

Profit jumped to $40.7 million or 22.69 cents a share in the six months ended Jan. 31, from $10.2 million, or 6.34 cents, a year earlier, the Rakaia-based company said in a statement. Revenue jumped to $439.3 million from $288.7 million in the prior period.

Looking ahead, Synlait said the second half is not expected to be as strong as the first half but “we continue to forecast strong overall earnings growth for the full year. Looking forward into FY19, ongoing growth in infant formula volumes are expected to continue to grow earnings.” In 2018, Synlait had a net profit of $38.2 million and revenue of $759 million.

Synlait’s shares have more than doubled over the past 12 months with the milk processor buoyed by its association with milk marketing company a2 Milk, however, that outlook grew cloudy when a2 announced a new supply arrangement with dominant dairy company Fonterra Cooperative Group in February. That deal prompted a joint release from a2 and Synlait stating the new relationship doesn’t change Synlait’s exclusive infant formula supply arrangements with a2.

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