InFY16-17, Synlait infant formula sales increased by 17%. In the...

InFY16-17, Synlait infant formula sales increased by 17%. In the same period A2 milk revenue increased by 56% and NPAT by 200%. This implies A2m revenue increasing by 3.3% for every 1% increase in SYnlait infant formula sales.

In FY17 to FY18, Synlait infant formula sales increased by 90%. In the same period, A2 milk revenue increased by 68% and NPAT by 115%. This implies A2m revenue increasing by 0.76% for every 1% increase in SYnlait infant formula sales.

Synlait has indicated an increase in formula sales by up to 26.4% (top end of guidance). I notice in the other threads, this is taken as having a direct link to A2m revenue/ profits but looking at the past two years that doesnt seem to be the case.

If we use 16 - 17 FY as our base case then revenue could be up by as much as 87% but if we look at FY17/18 then it would imply revenue in FY19 to be up by only 20%.

I think part of the reason revenue grew less than the infant formula sales by Synlait last year is because A2m was building up inventory so that hasnt translated into the A2m revenue figures.

I want to hear other peoples thoughts on why there is such a large difference in how between FY16/17 (3.3%) and FY17/18 (0.76% increase in revenue for 1% increase in Synlait infant formula sales).