Synlait Milk (SML) H1 2025 earnings summary

Executive summary

• Returned to profitability in HY25 with net profit after tax of $4.8 million, reversing a prior loss, driven by strong Advanced Nutrition demand, operational improvements, and cost control.

• EBITDA reached $63.1 million, up 217% year-over-year and slightly above guidance.

• Revenue rose 16% year-over-year to $916.8 million, with gross profit up 99% to $87.0 million.

• Net debt reduced by 29% to $391.9 million, mainly due to a major equity placement.

• Operational focus on cost, quality, yield, and rebuilding farmer trust, with new CEO Richard Wyeth to start May 2025.

Financial highlights

• EBITDA up $43.2 million year-over-year; NPAT improved by $101.0 million compared to prior period.

• Gross profit per MT increased to $709, and return on net operating assets improved to 8.7%.

• Operating cash flow improved by $86.1 million but remained negative at $(12.0) million due to higher advance payments to suppliers.

• Net assets increased to $796.7 million from $698.9 million at 31 January 2024.

• Basic and diluted EPS turned positive after several loss-making periods.

Outlook and guidance

• FY25 full-year EBITDA expected to significantly improve over FY24, though second-half progress will be slower due to milk stream returns and FX risks.

• Targeting closing net debt of $250–$300 million and net senior debt to EBITDA ratio below 2.5x for FY25.

• Confident in milk supply for FY26, with most farmer suppliers remaining and new supplier interest exceeding expectations.

• Directors acknowledge ongoing material uncertainty regarding access to capital until sustained improvement and sufficient withdrawal of cessation notices are confirmed.

• Continued focus on operational efficiency, customer delivery, and value creation for customers.