Synlait (ASX: $SM1) reports half-year results for 2024

Synlait (ASX: $SM1) has reported its half-year results for the six months ended 31 January 2024. The company's total group revenue reached $793.5 million, with a net loss after tax of ($96.2) million. The adjusted net loss after tax was ($17.4) million, in line with the guidance range released in February 2024. Synlait has outlined a clear deleveraging plan to reduce total debt to a sustainable level, with ongoing initiatives to address material uncertainties and improve financial performance.

Executive commentary on deleveraging plan and business recovery progress

The company acknowledges the challenges it faces with significant loan repayments falling due over the next 12 months, including $514m of debt at 31 January 2024. Successful execution of deleveraging options is crucial to meeting repayment obligations. The banking syndicate remains supportive, recent amendments to banking facilities have been executed, and a letter of support has been received from Bright Dairy. Synlait is progressing with equity raise preparations, and the strategic review of North Island assets has commenced. The company is committed to improving manufacturing and quality performance, optimizing the supply chain, and reducing costs to achieve its deleveraging and growth objectives.

Outlook and guidance for the future

Synlait's outlook for the future involves a strong focus on deleveraging its balance sheet and improving profitability for the remainder of 2024. The company aims to accelerate volume growth in its Advanced Nutrition and Foodservice businesses, optimize performance across all categories, and continue with its cost reduction initiatives. The ongoing strategic review of North Island assets and the sale process of Dairyworks are expected to contribute to the deleveraging plan. Despite facing material uncertainties, Synlait remains committed to addressing these challenges and achieving its financial and operational goals.