Synlait shares sink after earnings warning
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More news: Shares in Synlait have sunk more than 10% to 71.5 cents in early trading on the ASX after the dual-listed New Zealand dairy producer flagged a $16 million to $20 million half-year due to rising costs and reduced margins.
The group also downgraded its full year earnings expectations and now says the result is more likely to be "broadly flat or down on FY23".
Synlait flags half-year loss as costs rise
The news: New Zealand dairy producer Synlait has flagged a half-year loss when it reports results in March, citing rising costs and reduced margins.
The numbers: The company expects to report a net loss in the range of NZD17 million to NZD21 million ($16 million to $20 million) for the half year to 31 January, down from a NZD4.8 million profit a year ago.
The context: The dual-listed company said the result has been mainly impacted by increased financing and operational costs, ingredient margin reductions and advanced nutrition margin reductions.
In September, Synlait warned of inflationary pressures across its cost base and softening global conditions. At the time, it had expected earnings to improve over the full year, but now says FY24 earnings are broadly expected to be flat or lower.
The company said it is prioritising on the need to cut down debt on its balance sheet. The downgrade comes amid worsening relations with top customer and major shareholder A2Milk over Synlait’s exclusivity rights on supply of certain types of infant milk formula products.
The source: ASX announcement
