Synlait Milk Limited (ASX: SM1) reported a challenging first half for FY26, reflecting ongoing operational and financial pressures. The company is undertaking a strategic reset, with the sale of its North Island assets scheduled for 1 April 2026. This divestment is expected to materially strengthen the balance sheet by reducing debt and allowing Synlait to refocus its core operations in Canterbury. Although manufacturing issues at the Dunsandel site have largely been resolved, residual costs and disruptions continued to affect performance. Inventory rebuild requirements led to higher raw milk sales during the period, weighing on margins, while weaker commodity returns further pressured earnings. Synlait also adopted a conservative accounting stance by not recognising additional deferred tax assets beyond July 2025 levels. As a result, underlying EBITDA for HY26 is expected to range from breakeven to NZ$5 million, with a significant reported loss. Management remains confident that the reset strategy can restore profitability, though recovery is expected to take time
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au
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Synlait Milk Limited: HY26 Performance Update Highlights
Synlait Milk Limited (ASX: SM1) reported a challenging first half for FY26, reflecting ongoing operational and financial pressures. The company is undertaking a strategic reset, with the sale of its North Island assets scheduled for 1 April 2026. This divestment is expected to materially strengthen the balance sheet by reducing debt and allowing Synlait to refocus its core operations in Canterbury. Although manufacturing issues at the Dunsandel site have largely been resolved, residual costs and disruptions continued to affect performance. Inventory rebuild requirements led to higher raw milk sales during the period, weighing on margins, while weaker commodity returns further pressured earnings. Synlait also adopted a conservative accounting stance by not recognising additional deferred tax assets beyond July 2025 levels. As a result, underlying EBITDA for HY26 is expected to range from breakeven to NZ$5 million, with a significant reported loss. Management remains confident that the reset strategy can restore profitability, though recovery is expected to take time
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au