Synutra International, the Chinese infant formula producer, has forecast a rise in annual profits in its new financial year after seeing earnings slide in the year to the end of March.

The company expects net income will be between US$25m and $30m in the 12 months to the end of March 2017, compared to the $21m it generated in the year that closed on 31 March 2016.

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That result compared to $72m in the previous financial year. Synutra pointed to a fall in sales from its nutritional food division – which is mostly made up of branded infant formula products – for the decline in earnings. An $8.8m loss from Synutra’s contract with French dairy group Sodiaal also weighed on its bottom line.

In the 12 months to the end of March this year, Synutra generated group net sales of $365m, down 11.8% on the previous year. Net sales from Synutra’s nutritional food arm dropped 15% to $328.6m.

The declines were steeper in the fourth quarter. Company-wide net sales fell 21.8% to $86.1m. Nutrition food sales slid 23.5% to $80.4m.

Chairman and CEO Liang Zheng said: “Our fourth quarter of fiscal 2016 results continued to reflect several business headwinds in our nutritional food segment, including a competitive environment, lower birth rates during the Year of the Sheep, an uncertain regulatory environment and unfavorable foreign currency exchange rates. We have also experienced some challenges with our nutritional supplement segment.”

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Fourth-quarter nutritional supplement sales stood at $1.1m, versus $4.6m a year earlier.

Synutra expects its annual net sales to hit $500-550m this year, driven by higher sales of powdered infant formula, liquid milk and bulk milk powder. The company also expects an increase in sales of bulk whey protein powder, when its project with Sodiaal starts operations next month.