NZ's Synlait Milk swings to first-half loss on weaker returns, operational snags (updated)

Synlait Milk

22/03/2026 20:13

Manufacturing issues at Dunsandel plant continue to weigh on earnings

Synlait withdraws fiscal 2026

Shares fall 1%, in line with broader market

Recasts paragraph 1, adds analyst comments in paragraphs 3-4, updates shares in paragraph 5

By Rajasik Mukherjee

March 23 (Reuters) - New Zealand's Synlait Milk SML.NZ swung to a first-half loss on Monday, hurt by weaker returns and challenges at its Dunsandel plant last year that forced a reshuffle of its manufacturing to whole milk powder just as prices slumped.

Synlait reported a net loss after tax of NZ$80.6 million ($46.86 million) for the half-year ended January 31, compared with a profit of NZ$4.8 million a year earlier, and withdrew forecasts for the remainder of the financial year.

"Troubled results have been a feature for some time now," said Matt Montgomerie, senior equities analyst at New Zealand-based Forsyth Barr.

"While this half was particularly challenging reflecting some of the manufacturing challenges faced last year, which in theory should be one-off in nature, these have persisted for longer than expected."

Shares of the dairy producer fell as much as 2% after the results were released and last traded down 1%, in line with the benchmark S&P/NZX 50 index .NZ50.

In July, the firm flagged manufacturing challenges at its Dunsandel facility, its primary manufacturing hub, across a range of product segments.

In February, Synlait said it had fixed most production problems at the plant, but the fallout continues to strain the business through higher costs.

Its plan to rebuild customer inventory resulted in Synlait having surplus milk which it tried to sell. However, several sales of the excess milk fell through, forcing the company to halt catch‑up production.

It then had to divert volumes into whole milk powder, the only product its dryers could handle. The shift came just as global whole milk powder prices slumped in late 2025, delivering heavy losses in its ingredients unit, the company said.

“The core takeaway from today’s result is that it does not reflect Synlait’s future. Next week’s North Island assets sale is on track to deliver a stronger and simpler Synlait," Synlait CEO Richard Wyeth said in a statement.

The company flagged the sale of its loss-making North Island assets last year.

($1 = 1.7200 New Zealand dollars)

 (Reporting by Rajasik Mukherjee; Editing by Diane Craft and Chris Reese)

 ((Rajasik.Mukherjee@thomsonreuters.com;))