Debt-laden Synlait Milk said it expects to report a first half loss of $17-$21 million in March. Photo / NZME
Debt-laden Synlait Milk said it expects to report a first half loss of $17-$21 million in March, driven by increased financing and operating costs.
Reduced ingredient and advanced nutrition margins would also contribute to the shortfall, it said.
Synlait’s first half 2023 profit was $4.8m.
The annual result for 2024 was also likely to be flat or down on 2023′s, the company said.
The milk processor, which counts infant formula marketer a2 Milk as its biggest customer, has a $130 million debt repayment due on March 28.
The half-year loss range was based on Synlait’s initial consolidated result, which was subject to further review and may be subject to further adjustments as the company prepared its half-year financial statements for release on March 25, it said.
Fresh produce company T&G Global is forecasting a FY23 loss before tax of between $60 million and $67m, about double that of its assessment after Cyclone Gabrielle’s damage a year ago.
In a statement to the NZX, the company, formerly Turners & Growers, said the new forecast for the 2023 financial year compared to the outlook provided to the market last May, which indicated a full year loss before tax of between $28m and $34m. It said the earlier forecast was based on an initial assessment of storm losses and the expected insurance recovery.
The company said the main reason for the change was the complexity of the insurance claim from the February 2023 cyclone damage, which caused delays in finalising the value of the insurance claim receivable at balance date.
The company expects to announce its FY23 results on February 29.
In May last year the company said Cyclone Gabrielle had severely affected the group’s Hawke’s Bay plantings.
Fonterra has increased its 2023-24 season forecast farmgate milk price by 30¢.cents.
The midpoint rose to $7.80 per kilogram of milk solids (kgMS), up from $7.50/kgMS. The forecast range for the season also increased to $7.30-$8.30/kgMS, up from $7-$8/kgMS.
Fonterra chief executive Miles Hurrell said the price lift came off the back of five strong global dairy trade (GDT) auctions.
“Recently, we’ve seen a lift in demand, primarily from the Middle East and Southeast Asia, for our reference commodity products and this has been reflected in GDT prices,” Hurrell said. “Overall GDT prices are up 10 per cent since our last farmgate milk price update in December, with whole milk powder prices up 11.5 per cent over the same period.”
Hurrell said he was confident of Fonterra’s ability to weather geopolitical instability and supply chain disruption in importing regions.
“We can navigate these dynamics thanks to our scale and our diversification across markets, which provides us with optionality.”
Accountants say it could have achieved the same thing with a more targeted approach.