Synlait Milk (SML) H1 2026 earnings summary

Executive summary

• Reported a net loss after tax of $80.6 million for the half year ended 31 January 2026, with results impacted by manufacturing disruptions, inventory rebuilds, and a global downturn in whole milk powder pricing.

• EBITDA loss was $34.7 million, with net debt rising 88% to $472.1 million; directors note material uncertainty regarding ongoing access to capital.

• A recovery roadmap—Stabilise, Simplify, and Scale—has been launched, with the imminent sale of North Island assets to Abbott for $307 million expected to reduce debt and strengthen the balance sheet.

• No FY26 financial guidance provided; focus is on operational execution, recovery, and margin improvement.

• Financial statements prepared on a going concern basis, but auditor highlights significant doubt due to capital access risks.

Financial highlights

• Revenue reported at $949 million, up $32.3 million year-over-year; underlying EBITDA was $4.1 million, and underlying net loss after tax was $27.3 million.

• Gross profit dropped to $3.1 million, a decrease of $83.9 million year-over-year; operating cash outflow was $183.4 million.

• Net debt increased to $472.1 million as of 31 January 2026.

• Basic EPS from continuing operations was $(13.37) cents, down from 1.01 cents year-over-year.

• Inventory levels rose to $423.7 million, up from $347.1 million year-over-year.

Outlook and guidance

• No FY26 financial guidance provided; leadership is focused on executing the recovery plan and expects a period of underpromising and overdelivering.

• North Island asset sale is expected to close 1 April 2026, materially reducing debt and removing a loss-making asset.

• Recovery plan emphasizes operational stability, cost control, and margin improvement over the next 12–24 months.

• Management expects trading performance to recover post asset sale, with focus on South Island operations and stable production lines.