Synlait Milk's result, due on Monday, is expected to show the dairy processor's earnings flattened over the 2020 financial year, but the more pressing issue for investors is the legal wrangle over its new $280 million plant at Pokeno.
The company's original guidance was for its profit to continue to grow in 2020, at least at a similar rate to 2019 over 2018 - 10 per cent.
But in an updated forecast in February, the milk processor and infant formula manufacturer said it expected its earnings to be between $70m and $85m for the year to July 31, compared with last year's net profit of $82.2m.
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Forsyth Barr expects Synlait's net profit of $80m, down 3 per cent from last year. A consensus of market expectations puts the number at $78.1m.
Synlait's chief executive Leon Clement has blamed the more subdued outlook on significantly lower than anticipated infant base powder sales due to China infant nutrition market consolidation causing a reduction in demand from brand owners.
Volatile lactoferrin prices were another factor.
And while Synlait still anticipated growth in consumer-packaged infant formula sales volumes over the full year, that growth was not as strong as it had initially envisaged.
Synlait, which makes all of The a2 Milk Company's infant formula, said a2 Milk's contribution to this growth had not changed.
Looming large for Synlait Milk will be outcome of a legal wrangle over the construction of its plant at Pokeno.
In 2018, Synlait bought land at Pokeno and began building a dairy processing plant.
Part of the purchase agreement included Synlait securing a release from a covenant on the land that restricted activity to farming, forestry and lifestyle blocks.
Permission was only granted by the High Court in November 2018, when construction was well under way.
A neighbouring landowner took the decision to the Court of Appeal, which reinstated the covenants.
Synlait has since been granted leave to appeal to the Supreme Court and a hearing took place in early June.
Uncertainty over the now-completed plant at Pokeno has weighed on Synlait's shares; they last traded at $6.00 each, having lost 35 per cent over the last 12 months.
Much has changed for Synlait Milk over the course of the year.
First there has been a higher level of capital investment, followed by February's surprise earnings warning.
Then there is key customer a2 Milk's plan to make its own formula, the Pokeno Supreme Court hearing in June, and the acquisition of Dairyworks.
"We are interested in an update on all these areas, as well as any progress with new customers and first-time 2021 outlook," Chelsea Leadbetter of Forsyth Barr said in a research note.
Synlait Milk, which is 39 per cent-owned by China's Bright Dairy and 19.9 per cent by a2 Milk, last year bought Christchurch-based cheese supplier Dairyworks for $112m.
At the time Synlait said the acquisition would provide Synlait with "another meaningful move towards the delivery of our everyday dairy strategy" and complements the company's recent acquisition of cheese manufacturer Talbot Forest.
Looking ahead, growth will be underpinned by the recent Dairyworks acquisition,
"Recent expansionary capex is weighing on near-term returns, with cost investment a drag in the early stages until utilisation ramps up," she said.
Synlait had capacity to fill. "We want to see progress with new customers to de-risk recent capital investment, narrow the potential earnings outcomes and show Synlait can replicate success on its larger asset base," she said.
"Synlait's legal issues at Pokeno also need resolution."