Synlait Milk Limited Analysis

Overview

About Synlait

At Synlait we combine expert and sustainable farming practices with state-of-the-art manufacturing processes to produce a range of nutritional milk products that provide genuine benefits for human health and wellbeing.

Our purpose Doing Milk Differently For A Healthier World is driven by being different, essential nutrition and sustainability. Our disruptive, innovative spirit combined with resolute determination to do the right thing for planet and people sets us apart from the competition.

Founded in 2000, Synlait is based in Dunsandel, Canterbury and employs more than 1,000 people.

Synlait listed on the NZX in July 2013. This was followed by a compliance listing on the ASX in November 2016. In 2019, Synlait joined the NZX Debt Market, issuing NZ$180 million of unsecured, subordinated, fixed rate bonds.

Our locations

Today we have eight sites based across seven locations in New Zealand and China:

• Auckland: blending and canning facility
• Pokeno: second infant-capable manufacturing facility
• Palmerston North: research and development centre at Massey University
• Christchurch: administration office and Dairyworks
• Dunsandel: fully integrated manufacturing facility and administration office
• Temuka: Talbot Forest Cheese manufacturing
• Shanghai: sales office

Our products

We produce a range of added-value milk powders and nutritional products, such as retail-ready infant formula. Our customers are leading global health and nutrition companies, with established brands and strong retail distribution channels.

In early April 2019 we began manufacturing fresh milk and cream in our newly commissioned Advanced Liquid Dairy Packaging Facility at Dunsandel.

As part of our Everyday Dairy growth strategy, Talbot Forest Cheese joined the Synlait family in August 2019, followed by Dairyworks in April 2020. Talbot Forest Cheese (a speciality cheese manufacturer and distributor) is based at Temuka in South Canterbury and Dairyworks (supply iconic and much-loved New Zealand brands to the consumer and foodservice markets) in Christchurch.

Our farmer suppliers

Synlait has a network of nearly 300 farmer suppliers in two of New Zealand?s major dairy farming regions; Canterbury and Waikato.

Our Synlait journey begins on farm with top quality milk and continues throughout its manufacturing and supply chain process to its customers, and then onto their consumers. As a key part of that journey, Synlait is proud of its certified best-practice dairy farming programme, Lead With Pride(TM) which supports its farmer suppliers to achieve farming excellence.

For more information about Synlait, visit: www.synlait.com

Performance

The following information was extracted from Synlait Milk Limited's market update, released 4 February 2026:

Synlait Milk Limited (Synlait) is providing an update on its financial performance for the six months ended 31 January 2026 (HY26).

The current financial year will deliver a valuable reset for Synlait, with the sale of the company’s North Island assets due for completion on 1 April 2026. The 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.

While the manufacturing challenges experienced at Dunsandel have now been largely resolved, Synlait 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’s first half performance has also been impacted by lower relative returns from our commodities portfolio. In addition, Synlait has taken a conservative approach and not recognised further deferred tax assets arising from unused tax losses beyond those recorded at 31 July 2025. Synlait has not been impacted by the ARA ingredients associated with recent infant formula recalls.

Given the above, Synlait is expecting underlying 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.

As noted in Synlait’s FY25 financial statements, an insurance claim has been accepted relating to the losses Synlait incurred as a result of the manufacturing challenges. While the claim is expected to recover a portion of these losses, the final amount and timing of reimbursement remain subject to further assessment and settlement processes. The company will provide further updates in due course.

Synlait has not yet closed its books for the half year, and this preliminary update remains subject to an audit review process being completed.

Synlait is actively engaging with its banking syndicate while working towards the completion of the North Island asset sale on 1 April 2026.

CEO Richard Wyeth commented: “We are very disappointed with the six-month result and the impact it has had on the pace of our financial turnaround. However, we have made progress with real momentum in our operations, a renewed Canterbury-based ELT, and the North Island sale 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.”