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Majority of suppliers want to quit dairy giant Synlait

Synlait news

Embattled dairy company Synlait Milk’s financial challenges grow with over half of its suppliers saying they want to exit.

The company has downgraded its earnings outlook and abandoned plans to sell a major asset, according to a report in state media. The dual-listed company, trading on both the New Zealand and Australian stock exchanges, announced the dire news on the Australian market, taking advantage of the King’s Birthday public holiday closure in New Zealand. The company, which boasts nearly 300 suppliers of A2 milk, acknowledged the notices from a “significant majority” of its suppliers, noting it was a foreseeable response to the company’s current performance. The corporate unrest is poised to take effect in 2026, reflecting the suppliers’ desire for Synlait to deleverage its balance sheet, thus enhancing advanced rates.

Synlait’s financial strain is underscored by a $96 million half-year loss, a hefty $130 million loan repayment, and the inability to offload its Dairyworks division, valued at $120 million.

The company’s forecasted full-year earnings now hover at the lower end of its $45 million-$60 million range, exacerbated by escalating costs, declining sales, and a tumultuous relationship with its major customer, A2 Milk.

Synlait’s net debt stood at $559 million at the half-year mark, with a delayed loan repayment deadline looming in mid-July, thanks to an agreement with its bankers. Amid this financial storm, China’s Bright Dairy, a major shareholder, has proposed a lifeline in the form of a shareholder loan, contingent on approval. Despite these measures Synlait’s share price has plummeted by 80% over the past year, reflecting the gravity of its financial predicament and the ongoing risks from its dispute with A2 Milk.

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2 COMMENTS

  1. Synlait, a partner of Nestlé, should start change from within by changing their woke policies and the horrible pink brand design. Bet they have a “rainbow day”.

  2. What could go wrong, we sold our cows and technology to China now they don’t need our milk products- DOH

    Best bet is to sell direct to the consumer. Set up your own small factory and cut the ticket clippers out. We are so lucky to have a small farm and processing plant near us so we get REAL milk without all the good stuff taken out. More expensive but SO a worth it. Comes in glass reusable bottles too.

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