New Zealand-based dairy company Synlait has reported a return to profitability in its half-year financial results. The company recorded an EBITDA of $63.1 million and a net profit after tax of $4.8 million for the six months ending January 31, 2025. This turnaround follows financial struggles in the previous year, aided by operational improvements and financial support from major shareholder Bright Dairy. Synlait is focusing on reducing debt, enhancing farm-level offerings, and improving operational efficiencies.
Synlait, a leading dairy company based in New Zealand, has announced a return to profitability in its half-year financial results. The company reported an EBITDA of $63.1 million and a net profit after tax of $4.8 million for the six months ending January 31, 2025. This marks a significant recovery from its previous financial struggles, reflecting improved operational efficiency and strategic financial management.
Synlait, known for its innovative dairy processing and supply chain solutions, has faced challenges in recent years due to market fluctuations and debt pressures. However, the company has implemented a series of measures to enhance its financial stability. The forecast base milk price for the 2024/2025 season stands at $10/kg MS, with an additional premium bringing the total forecast average payment for suppliers to $10.48/kg MS.
Operational and Financial Turnaround
Acting CEO Tim Carter attributed this financial turnaround to fundamental improvements in operational performance. He expressed confidence that more farmers would withdraw cessation notices by March 31, 2025, to access new milk premiums. Additionally, Chairman George Adams emphasized the need for consistent delivery and performance for the remainder of the financial year.
To aid its financial recovery, Synlait secured a $130 million loan from Bright Dairy, its major Chinese shareholder, in July 2024. This financial boost helped reduce bank debt and improve liquidity. Looking ahead, Synlait aims to maintain a closing net debt between $250 million and $300 million and achieve a debt-to-EBITDA ratio below 2.5, positioning itself for potential refinancing by the end of the year.
With its financial footing stabilizing, Synlait is focusing on several strategic initiatives. These include enhancing on-farm offerings, serving both existing and new customers, and driving operational efficiencies. By strengthening its production processes and maintaining strong supplier relationships, the company aims to sustain profitability and long-term growth in New Zealand’s competitive dairy sector.
As Synlait continues its recovery, industry analysts will be closely watching its performance in the upcoming quarters. The company’s ability to maintain profitability and manage financial obligations will be crucial for its ongoing success in the global dairy market.
