NEW ZEALAND – John Penno, co-founder and former managing director of Synlait, has resigned from the company’s board, marking a significant leadership change.
According to a press release from the company, in his place, George Adams has been elected as the new chair, effective immediately.
Penno, a key figure in Synlait’s establishment, transitioned to a board-appointed director in 2018 after serving as CEO and chair.
In a statement, Penno noted that Synlait has come a long way since it was founded on a farm in South Canterbury almost 25 years ago.
“We now take world-class nutrition products to the world and have played a disruptive role in the growth of the New Zealand dairy industry. I am proud of what we have achieved,” he said.
“However, now is the right time for me to leave my leadership role with Synlait. I remain committed to Synlait’s future as a co-founder and shareholder.”
He expressed support for Adams’ appointment, affirming his continued dedication to Synlait’s vision and legacy. Reflecting on Synlait’s journey, Penno emphasized the company’s transformative impact on the New Zealand dairy industry.
Adams, appointed as an independent director in March 2024, will leverage his governance experience to guide Synlait’s path back to profitability.
He praised his fellow directors and expressed readiness to collaborate with CEO Grant Watson to execute the company’s strategy.
Penno’s departure coincides with the release of Synlait’s interim financial results, which revealed a significant net loss attributed to operational challenges.
The company reported a net loss of US$96.2 million for the six months ended Jan 31 2024. This is compared to a net loss of US$17.4m in the same period last year.
The company’s revenue increased by 3% to US$793.5m, while gross profit was down 47% to US$43.6m. Synlait also announced a higher forecast base milk price for the 2023/2024 season at $7.80 per kilogram of milk solids, up from US$7.50.
In light of the financial results, the company updated its full-year 2024 guidance and now expects the EBITDA result to be significantly lower than FY23, in the range of US$45m to US$60m.
Synlait attributed the lower guidance to softening demand and/or margins, adverse foreign exchange and product mix, and increased operating expenses.
Former acting chair Paul McGilvary and CEO Grant Watson emphasized the importance of reducing debt levels and exploring strategic recovery options amid Synlait’s financial predicament.
Adams’ appointment follows a strategic succession plan, reflecting the board’s commitment to transparent governance practices.
He will stand for election as an independent director at Synlait’s upcoming annual meeting in December, underscoring the company’s focus on sustainable leadership.
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