Synlait shares jump on return to profitability
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More news: Shares in Synlait have jumped nearly 21% to 43.5 cents in early trading on the ASX after the New Zealand dairy producer said it expects a return to profitability in the first half of this financial year.
The improvement comes just months after securing a recapitalisation from major shareholders along with bank debt refinancing.
It also lifted its guidance for first-half earnings to a range of NZ$58 million ($52.4 million) to NZ$63 million, up from NZ$19.9 million a year ago.
Synlait flags return to profit, lifts first-half earnings guidance
The news: New Zealand dairy producer Synlait expects a return to profitability in the first half of this financial year and has announced a higher payment to South Island farmers to secure milk supply.
The numbers: The company expects earnings to be in the range of NZD58 million ($52.4 million) to NZD63 million for the six months to 31 January, up from NZD19.9 million a year ago.
It will also pay an additional 10 NZ cents per kg of milk solids to all South Island farmers for the coming three seasons. It comes on top of a one-off payment of 20 NZ cents per kilogram of milk solids for the 2024/25 season, announced in September.
Synlait's New Zealand-listed shares are trading nearly 24% higher at 52 NZ cents.
The context: Synlait’s turnaround comes just months after the embattled ASX and NZX-listed company secured a recapitalisation from major shareholders — China’s Bright Dairy and A2 Milk, along with bank debt refinancing, following a full-year loss amid heavy impairments.
Acting chief executive Tim Carter said the Synlait team worked extremely hard to lift productivity and performance in the past six months and the company expects to return to profitability at its half-year result.
The improvement was driven by new business development in advanced nutrition products, strong performance of the ingredients business, and continued cost control, the company said.
The source: ASX announcement
