Synlait Milk sees weak FY earnings

Shares hit record low
calendar icon 2 April 2024
clock icon 2 minute read

New Zealand's Synlait Milk on Tuesday forecast weaker earnings for the year and said it had started a strategic review of its North Island assets, sending its shares to an all-time low, reported Reuters

The dairy milk producer also swung to a net loss after tax of NZ$96.2 million ($57.23 million) for the half year ended January, compared with a net profit after tax of NZ$4.8 million last year.

Shares of the company dropped as much 14.67% to a low of NZ$0.640 by 2218 GMT.

Synlait said it was contemplating an equity raising along with the strategic review of North Island assets, which includes its manufacturing facility in Pokeno and its blending and canning facility in Auckland.

"Our strategic focus is on Advanced Nutrition and Foodservice where we have a clear competitive advantage to deliver diversified, high-value growth," Synlait CEO Grant Watson said in a statement.

The company added that its NZ$130 million loan repayment, which was due on March 28, has been extended to July 15.

Synlait also said it had received support from Bright Dairy, it largest shareholder with a 39.01% stake, including a commitment to participate in a future capital raising and to extend a loan at request.

Synlait expects earnings before interest, taxes, depreciation, and amortization (EBITDA) for fiscal 2024 to be between NZ$45 million and NZ$60 million, compared with NZ$90.7 million posted in fiscal 2023.

The company now expects base milk price for the 2023/2024 season to be NZ$7.80 per kilogram of milk solids (kgMS), higher than the earlier forecast of NZ$7.50 per kgMS.

($1 = 1.6812 New Zealand dollars)

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