Synlait Dairy Posts Major Loss but Sees Path to Recovery with Shareholder Support and Deleveraging Plan

New Zealand 01.10.2024

Synlait, the New Zealand dairy group, has reported a significant net loss of NZ$182.1 million for the financial year ending July 31, 2024, following a tumultuous period marked by debt and liquidity challenges. This marks a steep increase from the NZ$4.3 million loss recorded in the previous year. The losses included a NZ$114.6 million impairment charge on long-term assets.

Revenue for the year saw a modest 2% rise to NZ$1.64 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) reflected a loss of NZ$4.1 million. However, adjusted EBITDA posted a positive result of NZ$45.2 million.

Synlait’s recovery was made possible by the backing of key shareholders, including China Bright and A2 Milk Company (A2M), after a near-collapse earlier this year. A critical capital raising initiative was salvaged despite opposition from a small group of shareholders.

To secure milk supply over the next year, Synlait has announced a one-off payment of 20 NZ cents per kilogram of milk solids to South Island farmers, and an additional 5 NZ cents to North Island farmers.

Chairman George Adams acknowledged the company's challenging year, highlighting the focus on "deleveraging" as Synlait works to reduce its debt and return to stability through a two-step refinancing plan set to be implemented on October 1.