Synlait Milk says its earnings in both the six months ending January and the 12 months ending July are likely to be ahead of forecast.
Synlait Milk has previously forecast a $19.7 million annual profit for 2014.
The company says international dairy prices currently favour Synlait's mix of products and that it expects ongoing demand, particularly from China.
The company says although it's still early in the season, recent announcements suggest the milk price will be less than Synlait was expecting.
Synlait managing director and founder John Penno says his company still expects to pay its farmers at least $8 per kilo of milk solids.
He says there are differences between the different companies in the industry and so market dynamics effect them differently.
Mr Penno says product mix is increasingly important in a volatile market.
"We have a product mix that suits the current market conditions very well being based on milk powders and a product called AMF (anhydrous milk fat) which is a cream product - those products are all pricing well in the current market and we don't have exposure to some of the products that are not pricing as well."
Mr Penno says the announcement that milk prices are going to be lower than some were anticipating will mean a good earnings year for Synlait.
He says until now Synlait has told farmers it will pay $8 per kilo of milk solids, but they've now been told it will probably be higher than that.
Mr Penno says Synlait's policy is to pay the market price because as a small company it follows the price rather than setting it.
In the 12 months ended July this year, Synlait reported an $11.5 million net profit for the 12 months to the end of July compared with the $10.8 million prospectus forecast and the previous year's $4.4 million net profit.
Synlait's shares began trading in July after the company raised $75 million.
The shares, issued at $2.20, rose 20 cents to $3.95 on Wednesday.
