Synlait Milk sees annual earnings at lower end of forecast

The company posted NZ$90.7 million in fiscal 2023
calendar icon 4 June 2024
clock icon 1 minute read

New Zealand's Synlait Milk said on Monday it expected its annual earnings to be at the lower end of its forecast and flagged that a significant majority of its farmer suppliers had submitted cessation notices, reported Reuters.

The dairy milk producer had earlier forecast its fiscal 2024 earnings before interest, tax, depreciation and amortisation (EBITDA) to be between NZ$45 million and NZ$60 million ($27.67 million-$36.89 million), compared with the NZ$90.7 million posted in fiscal 2023.

The company, which has been reeling under high levels of debt, swung to a net loss in the first half and started a strategic review of its North Island assets.

Its farmer suppliers have signalled they want the company to reduce its debt so that milk prices can be lifted amid rising farm costs, Synlait said.

Last week, the company said it expected the base milk price for the 2024/25 season to be NZ$8.00 per kilogram of milk solids (kgMS).

The company said the cessation notices did not affect its current financial performance but would affect milk supply from the 2026 financial year if they were not withdrawn.

Synlait also agreed to borrow NZ$130 million from Bright Dairy, its largest shareholder, for the repayment of a loan due mid-July.

($1 = 1.6265 New Zealand dollars)

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