Synlait shares tumble over withdrawal of earnings guidance
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More news: Shares in Synlait Milk tumbled nearly 7% to 28 cents on the ASX after the dual-listed New Zealand dairy producer withdrew its full-year earnings guidance citing continuing uncertainty.
The company said it now expects earnings to be lower than the NZ$45 million ($40.6 million) to NZ$60 million range it had outlined in April but continuing uncertainty means it is unable to provide an updated outlook.
Synlait withdraws FY earnings guidance
The news: Embattled New Zealand dairy producer Synlait has withdrawn its full-year earnings guidance citing continuing uncertainty about the impact of higher than expected costs.
The numbers: The NZX and ASX-listed company said it now expects earnings to be lower than the NZD45 million ($40.43 million) to NZD60 million range it outlined in April but continuing uncertainty means it is unable to provide an updated outlook.
However, it said it remained on track to meet minimum adjusted earnings for bank covenant purposes. Its financial year will end on 31 July.
The context: Synlait said the immediate FY24 performance had been impacted by unforeseen year-end timing differences between July and August for manufacturing and shipping, along with additional costs related to the strategic review and deleveraging plan.
The announcement comes just days after the company repaid a NZD130 million loan due to banks, after raising a new loan from top shareholder China’s Bright Dairy.
Synlait reported a hefty first-half loss and has previously warned of material uncertainties after heavy writedowns amid a slow recovery in business performance. The dairy producer has also been looking to raise equity and speed up the sale of its underperforming North Island manufacturing facilities and Dairyworks assets.
The source: ASX
