Synlait shares rise on encouraging outlook
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More news: Shares in Synlait Milk jumped more than 7% to 38 cents despite the embattled New Zealand dairy producer widening full-year net loss to NZ$182.1 million ($167.24 million) following hefty impairments.
However, the dual-listed company said in its annual report that it expects to generate sufficient cashflows and have sufficient headroom in banking facilities to make good on its obligations to all creditors.
Synlait CEO Grant Watson said it begun "FY25 with new momentum and a stronger financial foundation".
Synlait widens full-year loss, lifts milk price
The news: New Zealand dairy producer Synlait has announced a one-off payment to South Island farmers to retain milk supply, despite its full-year loss blowing out after heavy impairments.
The numbers: The company posted a net loss of NZD182.1 million ($167.24 million) for the year to 31 July, 2024, up from NZD4.3 million a year ago. It follows an impairment of NZD114.6 million against long-term assets. Group revenue was up 2% to NZD1.64 billion.
The context: The dual-listed company also announced a one-off payment of 20 NZ cents per kilogram of milk solids to South Island farmers who continue to supply milk in the 2024/25 season. North Island farmers will get a 5 NZ cents per kilogram of additional payment, it said, justifying the increase as necessary to retain milk supply.
The results come days after the embattled dairy producer secured shareholder backing for a recapitalisation plan under which it will issue new shares to its top two shareholders — China’s Bright Dairy and A2 Milk.
What they said: “FY24 had a long list of urgent challenges for Synlait. We can now confidently draw a line under several of the difficulties faced and move onto the more important matters concerning running a growing and a viable business,” Synlait chair, George Adams, said.
The source: ASX announcement
