Synlait Raises Milk Price Forecast for 2024/25 Season Amid Volatility
Source: DairyNews.today
Embattled milk processor Synlait has announced an increase in its forecast base milk price for the 2024/25 season, lifting it from $8/kgMS to $8.60/kgMS. The decision, announced to the NZX this morning, reflects Synlait’s cautious but competitive stance in light of volatile global dairy commodity prices earlier in the season.
Despite the price hike, Synlait emphasized it would maintain a "conservative" approach to future forecasts. “Retention of Synlait’s milk supply remains a critical priority for the company,” the statement read, reinforcing its commitment to offering a competitive milk price and an enhanced rate profile for farmer suppliers. This strategy aims to ensure Synlait's on-farm offering remains attractive amid fluctuating market conditions.
The final milk price for the 2023/24 season will be confirmed when Synlait releases its full-year results later this month.
This move comes shortly after Fonterra raised its forecast to a midpoint of $8.50/kgMS, indicating heightened competition in the New Zealand dairy sector. Synlait's increased forecast underscores its efforts to stay competitive as it navigates financial restructuring and market challenges.
Synlait is also in the midst of seeking shareholder approval for a recapitalisation plan, which would involve offering $218 million in shares to its two largest shareholders, Bright Dairy of China and the a2 Milk Company (a2MC). If approved, Bright Dairy’s stake would increase from 39% to approximately two-thirds, while a2MC would retain its 19.83% holding.
A special shareholder meeting has been scheduled for September 18 to vote on the recapitalisation proposal. The outcome could significantly shape Synlait’s financial future as it strives to stabilize operations and remain competitive in the volatile dairy market.
The final milk price for the 2023/24 season will be confirmed when Synlait releases its full-year results later this month.
This move comes shortly after Fonterra raised its forecast to a midpoint of $8.50/kgMS, indicating heightened competition in the New Zealand dairy sector. Synlait's increased forecast underscores its efforts to stay competitive as it navigates financial restructuring and market challenges.
Synlait is also in the midst of seeking shareholder approval for a recapitalisation plan, which would involve offering $218 million in shares to its two largest shareholders, Bright Dairy of China and the a2 Milk Company (a2MC). If approved, Bright Dairy’s stake would increase from 39% to approximately two-thirds, while a2MC would retain its 19.83% holding.
A special shareholder meeting has been scheduled for September 18 to vote on the recapitalisation proposal. The outcome could significantly shape Synlait’s financial future as it strives to stabilize operations and remain competitive in the volatile dairy market.
23.09.2024
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