Synlait Milk Limited

Synlait reported FY25 group revenue of $1.8 billion, up 12% year over year, total group EBITDA of $50.7 million, gross profit of $105.3 million, operating cash flow of $165.5 million (up 451%), and net loss after tax of $39.8 million, an improvement of 78% year over year. Adjusted NPAT was $0.8 million, and net debt fell to $250.7 million, down 55% or $300.9 million. The company said one-off costs tied to Dunsandel manufacturing challenges were $43.5 million. Looking ahead, Synlait said it will not provide FY26 financial guidance because of the strategic reset; it plans to execute the North Island sale, use proceeds to reduce debt, and aims to release an updated strategy at the March 2026 half-year results. Management said it is targeting a net senior leverage ratio below 2.5x in FY26.

Richard Wyeth framed FY25 as “a year of 2 halves,” with a first-half return to profitability followed by second-half manufacturing disruption. His main strategic message was simplification: improve operational stability at Dunsandel, reduce complexity by selling the North Island assets, and reset the culture toward proactive performance. He sounded optimistic about the balance-sheet reset and said the sale would create a “stronger, simpler and more secure Synlait,” while also emphasizing that FY26 is a year focused on execution rather than detailed financial targets.

Andy Liu highlighted stronger underlying performance across the segments, including a $21.1 million increase in underlying gross profit in Advanced Nutrition, a $26.6 million improvement in Ingredients, and a $9.3 million increase in Consumer and Foodservice gross margin. He said underlying gross profit reached $142.5 million and noted operating cash flow improved by $213 million, while net debt decreased by $300.9 million or 55% to $250.7 million. He also said financing costs were $48 million, down $7 million from FY24, and expects them to reduce further in FY26 after refinancing. On capital structure, he said the company is targeting net senior leverage below 2.5x in FY26 and reiterated that North Island sale proceeds will principally be used to reduce debt.

Analysts focused on Dunsandel manufacturing issues, the economic impact of the North Island sale and the planned migration of a2 Milk English-label volume, and the amount of cost-out opportunity at Dunsandel. Management said the manufacturing problems from January to July are largely behind them but emphasized systems, training, and root-cause fixes because “you just never know what can be around the corner.” On the sale, management said the assets generated only about a $5 million to $10 million EBITDA improvement in FY25 and that the final use of proceeds is still being reviewed, though debt reduction is the priority. They declined to quantify the a2 migration impact, calling it commercially sensitive, and said they would provide more detail on strategy at the March update.