Synlait publishes HY24 result

Synlait publishes HY24 result: North Island strategic review commenced; and Bright Dairy and banking syndicate support in place.

Synlait Milk Limited (Synlait) has announced its financial results for the six months ended 31 January 2024.

Please find the following materials attached:

1. Synlait Half Year 2024 Announcement
2. Synlait Half Year 2024 Chair & CEO Review
3. Synlait Half Year 2024 Financial Statements
4. Synlait Half Year 2024 Investor Presentation
5. Synlait Half Year 2024 Shareholder Letter
6. NZX Results Template

Key financial metrics:

• Revenue up 3% to $793.5 million.
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $19.9 million. Adjusted EBITDA was $36.1 million.
• Net loss after tax was ($96.2) million. Adjusted net loss after tax was ($17.4) million.
• Net debt up 8% to $559.0 million.
• Gross profit down 47% to $43.6 million.
• Forecast base milk price for the 2023 / 2024 season is $7.80 per kg/MS up from $7.50 per kg/MS.

Full year 2024 (FY24) guidance statement

Synlait has updated its FY24 guidance.

The previously announced guidance stated that earnings before interest, taxes, depreciation, and amortization (EBITDA) performance was expected to be broadly flat or down compared to FY23. Synlait’s FY23 EBITDA was $90.7 million.

Synlait now expects the FY24 EBITDA result to be significantly down on FY23 within the range of $45 million to $60 million, excluding a non-cash adjustment for the product costing method change of approximately $17 million.

The FY24 EBITDA result is impacted by:

• Softening demand and/or margins across all business units.
• Adverse foreign exchange and product mix.
• Increased operating expenses e.g., legal costs, inventory management, and a range of other costs.

In addition to the above, Synlait is facing material uncertainties in respect of the timings and outcomes of various deleveraging options which are currently progressing. The deleveraging options include an equity raise, a North Island strategic asset review, and the sale of Dairyworks.

The half-year financial statements further detail these material uncertainties. All shareholders are encouraged to review this disclosure in detail.

The Board and Management remain fully committed to deleveraging Synlait's balance sheet and continuing the focus on improving profitability for the balance of 2024.

The FY24 EBITDA guidance excludes all current and future impairments relating to Synlait and Dairyworks.

Conference call details:

CEO Grant Watson and CFO Rob Stowell will host a webcast briefing on the result at 11.00am (New Zealand time). Participants can register for the webcast here:

https://ccmediaframe.com/?id=SPQQa98o

---

Announcement PDF