Synlait Milk anticipates reporting a net loss of between $NZ77 million and $NZ82 million for the half-year ending January 31. The dairy processor attributed the expected loss to ongoing manufacturing challenges at its Dunsandel plant, compounded by margin pressures arising from increased raw milk sales. Synlait Milk is a New Zealand-based company that processes milk into various dairy products, including infant formula and cheese, for local and international markets. They partner with farmers to ensure a reliable supply of high-quality milk.
According to Synlait, the manufacturing difficulties necessitated substantial alterations to production schedules this season. This required the rebuilding of inventory levels, resulting in the sale of commodities at lower margins, along with increased operating expenses. The company is actively working to resolve these operational inefficiencies to improve future financial performance.
In an effort to reduce its debt burden, Synlait is proceeding with the sale of its North Island assets, scheduled for completion in April. The proceeds from this sale are intended to facilitate a financial reset, with a renewed focus on the company’s operations in the Canterbury region. However, Synlait acknowledged that achieving full recovery and improved profitability will be a gradual process.
The company stated it is committed to streamlining operations and optimising its asset base to create long-term shareholder value, despite the current financial headwinds. Synlait is implementing strategic initiatives to enhance efficiency and improve profitability in the coming periods.
