Source: Radio New Zealand
The dairy company, majority-owned by China’s Bright Dairy, reported after tax result was $85.4m lower than the same period last year. Supplied/ Synlait
Synlait has described its half-year net loss of $80.6 million as disappointing as it pledges to deliver a pathway to recovery.
The dairy company, majority-owned by China’s Bright Dairy, reported after tax result was $85.4m lower than the same period last year.
Revenue rose just over $32m to $949m but debt soared by 88 percent to just over $472m. Synlait’s forecast base milk price rose from $9.50 to $9.70 taking forecast total milk price to $10.10 per kg/ms.
Chief executive Richard Wyeth said the company faced multiple headwinds – a major one being manufacturing problems as it tried to catch up on its supply of inventory to customers.
“The revised plan meant that we had surplus raw milk, particularly over the peak season,” he told an investor call.
“When we looked through the numbers, it became clear that the only option was to sell that milk through the peak.”
Wyeth said some of the milk sales didn’t go to plan and milk was sent back to its Dunsandel plant, which meant workers had to stop their inventory catch-up and process the extra milk into whole milk powder.
“Whole powder is the only ingredient that could be made at short notice without creating significant down time on the dryers, up to 48 hours to change.”
“To create the perfect storm, whole milk powder prices decreased sharply at the end of 2025 which impacted the returns on that ingredient portfolio.”
He described the season as one of the most frustrating seasons in his 18 years in the industry.
“We faced multiple headwinds, and had very little choice as to how we could deal with them. At each juncture, we carefully costed and analysed the options and even with the benefit of hindsight, there’s very little we would have done differently that would have improved this result,” he says.
Where to from here for Synlait?
The dairy company’s deal to sell North Island operations, including Pokeno manufacturing site, to global healthcare company Abbot for $307m is set to be completed by 1 April, Wyeth said.
“The transaction not only helps Synlait’s balance sheet, it removes a loss-making asset from our financial performance, and will deliver a simpler Synlait.
“From there, our stabilised, simplify and scale strategy provides a solid roadmap to return Synlait to success.”
Wyeth said it’s still working to rebuild customer inventory and expects an insurance claim to help cover some of the losses incurred as a result of manufacturing issues in the 2025 financial year.
The company did not provide guidance for the full year, with company chair George Adams saying there is a lot of work to do.
“Behind our roadmap, sits a real determination to ensure the coming 12 to 24 months will be seen as a period where Synlait under promised and over delivered,” he said.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
