Synlait Milk sees first-half profit recovery

NEW ZEALANDA – Synlait Milk, the New Zealand-based dairy and infant-formula business, has indicated a strong recovery in its first-half performance, with expectations of EBITDA more than tripling compared to the same period last year.

In a statement released today, the company revealed that it anticipates EBITDA for the six months ending December 31, 2024, to fall within the range of NZ$58 million to NZ$63 million (US$33.1 million to US$36.0 million).

This marks a significant improvement over the NZ$19.9 million reported in the first half of the previous fiscal year and the full-year loss of NZ$4.1 million recorded in the 12 months ending July 31, 2024.

Tim Carter, acting CEO since October, emphasized the company’s progress despite the challenges faced in the past year.

“The Synlait team has worked extremely hard to lift productivity and performance in the past six months,” Carter stated.

“Today’s announcement demonstrates the huge progress being made, and while we cannot take our foot off the pedal, we are pleased to announce we expect to return to profitability at our upcoming half-year result.”

Synlait’s recovery is attributed to several factors, including new business wins in nutrition products, an optimized product mix, and headcount reductions.

The company faced significant financial difficulties last year, requiring a NZ$217.8 million capital injection from its largest shareholders, China’s Bright Dairy and The a2 Milk Company.

This funding was crucial for the company’s survival and facilitated a settlement with A2 Milk over a long-standing contractual and pricing dispute.

Additionally, Synlait secured a NZ$130 million bailout loan from Bright Dairy, which now holds a 65.3% stake in the company.

The positive outlook for the first half signals a potential turnaround for Synlait Milk, which has been navigating challenging market conditions and financial pressures in recent years.