Synlait Milk (SML) H1 2026 earnings summary

Executive summary

• Reported a net loss after tax of NZD 80.6 million for the half year, driven by manufacturing challenges, inventory shortfalls, and a global downturn in whole milk powder pricing, with North Island operations classified as discontinued and sale expected to complete 1 April 2026.

• EBITDA loss was NZD 34.7 million, with net debt increasing to NZD 472.1 million, up 88% year-over-year.

• A recovery roadmap is underway, focusing on stabilizing operations, simplifying the business, and scaling growth, with new executive leadership in Canterbury.

• Directors consider the financial statements prepared on a going concern basis, but material uncertainty remains regarding access to capital and refinancing.

• Sale of North Island assets to Abbott for NZD 307 million is on track, expected to reduce debt and remove a loss-making asset.

Financial highlights

• Total group revenue was NZD 949 million, with underlying EBITDA at NZD 4.1 million and underlying net loss after tax at NZD 27.3 million.

• Gross profit dropped sharply, turning negative at NZD (1.4) million, down from NZD 94.5 million in the prior year.

• Operating cash flow was a net outflow of NZD 183.4 million, mainly due to working capital build and weak operating performance.

• Net debt increased to NZD 472.1 million, with loans and borrowings at NZD 504.4 million as of 31 January 2026.

• Milk price forecast for 2025/26 season raised to NZD 9.70, with total forecast including premiums at NZD 10.10.

Outlook and guidance

• No FY26 financial guidance provided; leadership is focused on executing the recovery plan and expects improved performance post-asset sale.

• Management targets operational stability and margin recovery over the next 12–24 months, with focus on South Island operations and stable production lines.

• Completion of the North Island asset sale is expected to materially reduce senior debt and strengthen liquidity.