Dairy company Synlait is 'very disappointed' with its latest six-month result and the impact it has had on the pace of the company's financial turnaround

Dairy company Synlait Milk [SML] is warning of a substantial loss for the first half of its current financial year and says it is "actively engaging" with its banking syndicate while working towards the completion of the previously announced $307 million sale of its North Island assets on April 1, 2026.

The share price dropped sharply, by nearly 20%, to 51c.

In a statement to NZX on Wednesday, Synlait said while manufacturing challenges experienced at its Dunsandel facility have now been largely resolved, the company continues to face related cost and operational impacts.

"The need to rebuild inventory across product segments required significant adjustments to Synlait’s manufacturing plans this dairy season, relative to a normal year. To enable these adjustments, additional raw milk sales were made during HY26, which weighed heavily on margins and operating costs," the company said.

"The company’s first half performance has also been impacted by lower relative returns from our commodities portfolio."

Synlait said it is expecting 'underlying' earnings before interest, tax, depreciation and amortisation (EBITDA) of between breakeven to $5 million for HY26, with a 'reported' EBITDA loss expected of $28 million to $33 million. For the same period, the company is forecasting an underlying net loss after tax of $33 million to $38 million with a reported net loss after tax of between $77 million and $82 million.

CEO Richard Wyeth said Synlait was "very disappointed" with the six-month result and the impact it has had on the pace of the company's financial turnaround.

However, the company had made progress "with real momentum in our operations", while the North Island sale is set to "fundamentally strengthen Synlait".

"Our strategy is being reset, and we are confident it will provide a pathway to return Synlait to success, although this will take at least 12 months."

Synlait said the current financial year "will deliver a valuable reset" for the company. The North Island asset sale will "substantially strengthen the company’s financial position, with the proceeds used to significantly reduce debt".

"The sale will enable Synlait to centre its core operations on Canterbury, with renewed focus on delivering continuous operational excellence and customer diversification to support longer-term profitability, however, it is clear the company’s recovery will take time.

"More information will be provided when the company releases its half year result on Monday, March 23, 2026."