Chinese infant food manufacturer Synutra International has said that it continues to feel the financial impact of unsubstantiated claims that its products caused premature breast growth in three infant girls.

The company’s third-quarter sales, for the three months to the end of December, more than halved, while net losses more than doubled.

Synutra attributed the falls to unsubstantiated claims that its products caused premature breast growth in three infant girls.

The company’s CFO Donghao Yang said on Thrusday (3 February): “The negative media reports from early August 2010 continued to drastically impact our financial results and our third-quarter sales of US$44.2m and net loss of $20.5m can be directly attributed to that disruptive event”.

The company said that during the quarter, net sales from its branded powdered formula segment were $20.7m, or 46.8% of net sales in the third quarter, compared to $37.3m or 90.5% of net sales in the second quarter.

Net sales of other products, which mainly consist of surplus milk powder, whey protein and raw milk sold to industrial customers reached $23.3m or 52.7% of net sales, compared to $2.9m or 7.1% of net sales in the second quarter.

However, Yang added that the company’s powdered formula sales and gross margin in December “give us reason to believe that the worst is behind us and we have begun a sustainable recovery”

Shares in the company were up 1.2% at the NYSE’s close last Thursday to $12.36 a share.

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