Synlait Milk (ASX: $SM1) Half Year 2024 Financial Results Overview

Synlait Milk (ASX: $SM1) has reported its half-year financial results for the six months ended 31 January 2024. The company's adjusted net loss after tax was $17.4 million, in line with guidance. Total group revenue was $793.5 million, with a total group net loss after tax of $96.2 million. The company is undergoing a strategic review of its North Island assets and has increased its forecast base milk price for the 2023/2024 season.

Executive Commentary on Half Year 2024 Results

It has been a challenging half-year for Synlait as we continue our reset of the company to better achieve our strategic objectives, while working to significantly reduce our elevated debt levels. The delivery of our half-year results brings together several reset initiatives, including amendments to our banking facilities, a strategic review of our North Island assets, and an increase in our forecast base milk price. The balance sheet reset initiatives are underpinned by a letter of support from our largest shareholder, Bright Dairy. We have highlighted several forward-looking initiatives as part of our business recovery plan to accelerate volume growth and further optimize our manufacturing, quality, and cost performance. Financial performance remains under pressure, with a net loss of $96.2 million after tax. We are facing material uncertainties with regard to the timings and outcomes of deleveraging options, which are critical in ensuring Synlait will continue to meet financial obligations as they fall due.

Summary of Half Year 2024 Results and Outlook

Synlait Milk (ASX: $SM1) has faced a challenging half-year, reporting a net loss of $96.2 million after tax. The company is undergoing a strategic review of its North Island assets and has increased its forecast base milk price for the 2023/2024 season. Despite the financial pressures, the company is committed to deleveraging its balance sheet and returning to sustainable profitability. The Board has updated its full year 2024 guidance, expecting the EBITDA result to be significantly down on FY23 within the range of $45 million to $60 million. Synlait is focused on driving efficiency and improving productivity across the company. The company has also made changes to its Executive Leadership Team structure and Corporate Governance to support its return to profitability. Synlait remains committed to paying a competitive farmgate milk price and advance rate, and is focused on diversifying its markets and categories in the lactoferrin business. The company is also working on operational performance improvements and asset stability. Despite the challenges, Synlait is determined to reset its balance sheet and return to sustainable profitable growth across diversified channels, categories, and geographies.