{"id":49021,"date":"2025-09-28T23:05:07","date_gmt":"2025-09-28T23:05:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/49021\/"},"modified":"2025-09-28T23:05:07","modified_gmt":"2025-09-28T23:05:07","slug":"synlait-strikes-deal-to-sell-pokeno-factory-for-307m","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/49021\/","title":{"rendered":"Synlait strikes deal to sell P\u014dkeno factory for $307m"},"content":{"rendered":"

\u201cThe sale will strengthen the company\u2019s financial position<\/a>, with the proceeds used to significantly reduce debt,\u201d Adams said.<\/p>\n

\u201cWe are equally pleased Abbott will onboard the vast majority of our people who work in these assets at completion \u2013 that is a great outcome.<\/p>\n

\u201cThis is a turning point we have fought hard for and are ready to embrace.\u201d <\/p>\n

Chief executive Richard Wyeth, who joined in May, said the sale was a much-needed step change for the dairy company.<\/p>\n

\u201cIn short, this sale will deliver a stronger, simpler and more secure Synlait,\u201d he said.<\/p>\n

\u201cIt enables us to, in time, explore opportunities to diversify what we do and better enable Synlait to reach its full potential.\u201d<\/p>\n

Synlait\u2019s majority shareholder, China\u2019s Bright Dairy, had stated that it would vote in favour of the transaction.<\/p>\n

Commenting on the result, Wyeth said numbers reflected the impact of previously advised \u201cmanufacturing challenges\u201d at Dunsandel. <\/p>\n

\u201cThese issues, which are now largely behind us, were complex and impacted our ability to continually deliver product on time, in spec and at scale.<\/p>\n

\u201cWere it not for these challenges, which resulted in costs, our result today would have reflected further progress in Synlait\u2019s business recovery.\u201d<\/p>\n

The \u201cadjusted\u201d bottom line was a net profit of $0.8m (unadjusted ($39.8m).<\/p>\n

Adams said in the annual report that Synlait faced \u201cunexpected turbulence\u201d in the second half in the form of manufacturing challenges that disrupted its Dunsandel operations, resulting in costs of $43.5m.<\/p>\n

\u201cThese came at the worst time for Synlait\u2019s recovery which, when you look at the underlying result, was on-track,\u201d he said.<\/p>\n

\u201cTo be clear, were it not for these manufacturing challenges, which resulted in one-off costs, our result today would have reflected further progress,\u201d Adams said.<\/p>\n

There had been a 55% reduction in net debt from $551.6m to $250.7m. <\/p>\n

Improvements in the trading performance in the year were reflected in unadjusted earnings before interest, tax, depreciation and amortisation (ebitda) increasing by $54.8m on 2024.<\/p>\n

The ingredients business turned a $13.5m loss to a gross profit of $13.1m.<\/p>\n

There was a 29% increase in Synlait\u2019s advanced nutrition business\u2019 gross profit to $95m.<\/p>\n

Synlait\u2019s milk price for the season just ended was $10.16\/kg of milk solids \u2013 matching market leader Fonterra\u2019s.<\/p>\n

A2 Milk, which owns just under 20% of Synlait, will soon be lessening its reliance on Synlait as its sole source of infant formula.<\/p>\n

The company recently completed the acquisition of an integrated nutritional manufacturing facility with two China label infant milk formula product registrations, also situated at P\u014dkeno.<\/p>\n

A2 Milk said the acquisition was a significant step forward in the execution of its supply chain transformation strategy.<\/p>\n

Synlait will continue making China-label formula production a2 Milk for some time to come, but a2\u2019s increased manufacturing independence will be an issue.<\/p>\n

Forsyth Barr senior analyst Matt Montgomerie said the sale was more important than the result.<\/p>\n

\u201cThe $307m us a very solid exit,\u201d he said.<\/p>\n

\u201cYes, it\u2019s below asset value – I\u2019d suggest about 0.8 times its asset value – but considering the Pokeno plant has clearly been a big challenge and has been loss making, I thnk the sales process that they have managed to achieve is a very solid outcome.<\/p>\n

\u201cIt may help to allay any balance sheet concerns and also removes the lossesfrom that plant,\u201d he said.<\/p>\n

Synlait\u2019s share price had been showing signs of life after speculation surfaced in August that it would soon sell its facility at P\u014dkeno.<\/p>\n

The plant \u2013 commissioned in 2019\/20 \u2013 has been a millstone for the company as it has never functioned at full capacity and has always turned in a loss.<\/p>\n

Synlait went through a major recapitalisation last year \u2013 which resulted in China\u2019s Bright Dairy\u2019s ownership going from 39% to 65.25% \u2013 after suffering a string of big losses.<\/p>\n

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cThe sale will strengthen the company\u2019s financial position, with the proceeds used to significantly reduce debt,\u201d Adams said.…\n","protected":false},"author":2,"featured_media":49022,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[42568,42571,74,28174,19092,138,7224,3468,5399,6097,13741,2082,42570,1132,111,139,69,42567,42573,770,42569,23940,13311,180,19063,20705,39193,61,42572,13797,102],"class_list":["post-49021","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-307m","tag-abbott","tag-after","tag-americas","tag-assets","tag-business","tag-dairy","tag-deal","tag-debt","tag-down","tag-factory","tag-for","tag-lossmaking","tag-million","tag-new-zealand","tag-newzealand","tag-nz","tag-pkeno","tag-proceeds","tag-processor","tag-rallied","tag-related","tag-sell","tag-shares","tag-strikes","tag-struck","tag-synlait","tag-to","tag-us178","tag-used","tag-with"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/49021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=49021"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/49021\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/49022"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=49021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=49021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=49021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}