Synlait Milk (SML) H2 2026 earnings summary

Executive summary

• FY26 remained financially difficult, but H2 operational stability drove a substantial recovery in EBITDA and net profit; priorities are stronger margins, cash generation, and revenue diversity.

• North Island asset sale simplified operations, addressed excess capacity, and strengthened the balance sheet; focus and investment shifted to Dunsandel and Dairyworks.

• Recovery roadmap spans Stabilise, Simplify, and Scale; manufactured-in-spec output improved to 93% for FY26 and 99% in August, with stronger production-plan attainment in H2.

Financial highlights

• FY26 revenue was $1.94B, up 6%; reported EBITDA was NZD 8.1m, reported net loss after tax NZD 75.4m, and gross profit NZD 37.7m.

• Underlying EBITDA was NZD 46.3m and underlying net loss after tax NZD 21.6m.

• Reported EBITDA swung from a NZD 34.7m H1 loss to NZD 42.8m profit in H2; H2 underlying EBITDA was NZD 38.1m. NPAT shifted from an H1 loss of NZD 80.6m to H2 profit of NZD 5.2m.

• Operating cash flow was negative NZD 183.3m, down 64%, mainly reflecting a working-capital build; year-end net debt was NZD 215m after asset-sale proceeds.

• Costs reduced performance by NZD 39.8m and price and mix by NZD 7.3m; consumer and food-service growth contributed NZD 2.3m.

Outlook and guidance

• No quantitative earnings guidance for the five-month transitional period ending 31 Dec 2026, given its short, seasonal, and non-comparable nature.

• Priorities include sustaining H2 momentum, optimizing product and customer mix, improving cash generation, and advancing operational excellence and debt reduction.

• New Middle East customer orders are expected to backfill 18% of lost volumes or capacity over the next 12 months, with full backfill targeted over three years; new-season milk volumes were expected 3%-6% above budget.

• A strategy to scale is due in 2027; FY27 is the first full calendar year, with priorities including higher-value products, customer diversification, and Canterbury asset returns.