Synlait Milk CEO Grant Watson resigns, interim leadership appointed

NEW ZEALAND – Synlait Milk CEO Grant Watson has stepped down after leading the New Zealand-based dairy and infant-formula business through a challenging 12 months. 

No official reason was given for his departure on October 21, with Synlait’s chairman George Adams simply noting that Watson is taking a break before deciding his next career move.” 

As the company begins its search for a new CEO, Tim Carter, the head of Synlait’s Dairyworks subsidiary, will step in as interim CEO, with Aaron Kenny assuming Carter’s role at Dairyworks temporarily.

Watson has been at the helm of Synlait since January 2022, a period marked by significant financial and operational turbulence. 

His departure comes after overseeing efforts to steer the company back to profitability, which has included an equity raise, debt refinancing, and the resolution of a long-standing contractual and pricing dispute with Synlait’s second-largest shareholder, The a2 Milk Company.

In a recent statement, Watson expressed his gratitude for having led Synlait through these challenges, stating, Synlait is an amazing and agile company, which I have been honoured to lead. Working with our passionate employees and farmers who care deeply about Synlait’s success has been a privilege.”

Under Watson’s leadership, Synlait successfully raised NZ$217.8m (US$137.5m) through contributions from its two largest shareholders—China’s Bright Dairy, which now holds 65.3% of Synlait, and The a2 Milk Company, which owns 19.8%. 

This funding round was crucial to completing the company’s debt restructuring and finalizing the settlement with A2 Milk, which had been involved in a long-running dispute over contractual and pricing issues.

However, despite these efforts, Synlait has struggled to return to profitability. 

For the fiscal year ending July 31, 2024, Synlait’s revenue increased by 2% to NZ$1.64bn, but the company posted a significant EBIT loss of NZ$182.7m, a stark contrast to the NZ$31m profit recorded in the previous year. 

Net profit after tax also plummeted, with the company reporting a loss of NZ$182.1m compared to a NZ$4.3m loss in the previous year. Furthermore, Synlait’s debt load has grown by 33% over the past year, now sitting at NZ$551.6m.

Chairman Adams acknowledged the difficulties the company has faced, stating, “Recent months have seen a long list of urgent challenges for Synlait, and Grant ably led the team through them. His achievements are extensive and notably include our balance sheet’s recent successful reset.”

Despite the financial setbacks, Watson’s tenure saw some critical wins for the company, particularly the resolution of its dispute with A2 Milk and the strengthening of its capital structure. 

The incoming CEO will inherit the task of continuing the turnaround plan, which focuses on returning the business to profitability and managing the company’s growing debt.

The market reaction to Watson’s resignation was swift, with Synlait’s share price closing down 8% to NZ$0.40 in New Zealand and falling 2.6% to 37 Australian cents in Australia. 

As Synlait navigates this leadership transition, it remains to be seen how the company will address its pressing financial challenges and realign itself for future growth.

Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE

Newer Post

Thumbnail for Synlait Milk CEO Grant Watson resigns, interim leadership appointed

Yili Group joins IDF Paris manifesto, sets carbon neutrality goals

Older Post

Thumbnail for Synlait Milk CEO Grant Watson resigns, interim leadership appointed

Kabrita sees growing demand for goat milk-based infant formula

Be the first to leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *