Shane Solly: Harbour Asset Management expert on Synlait selling their Pokeno plant for $307 million

Synlait has confirmed the sale of its loss-making factory at Pōkeno to US company, Abbott.

The infant-formula company is selling the site and related assets for $307 million, and will use the proceeds to pay down debt.

Harbour Asset Management expert Shane Solly unpacks the data further.

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talks be follow
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Speaker 2 (00:16):
Jane Soli Harbor Asset Management is with us.

Speaker 3 (00:18):
Hello, Shane Tona quere how are you very well?

Speaker 2 (00:23):
Thank you? Busy day for the dairy sector announcements today.
So you had an announcement from Fontira.

Speaker 3 (00:28):
Yeah, So Fontira is obviously sold Mainland group business to
La Talas, one of the big global groups, and it
announced a supply arrangement with them today. Basically a ten
year raw milk supply deal allow us both parties after
seven years to chop out with a thirty six months
notice keeping. Here is a good price for farm and
still based price of farm gate price plus some undisclosed

(00:50):
premiums link to volume and collection and so forth. And
really importantly their Fontier is expecting the same sort of
volumes they have been delivering into Mainland. So about tree
and fifty million leaders, similar levels of activity between the
two groups and terms of Finnish goods as well, all
up at a little bit of a support for the
Fonterierra ship race up a half percent to seven ninety

(01:10):
five today. That's the Pinetier shield.

Speaker 2 (01:12):
Of fund Sorry okay, and what about Sinnay.

Speaker 3 (01:15):
Yeah, so Sinlay has obviously been under pressure with you
rather than high levels a debt and a bit of
an operating profit problem over the last year. They came
out with a result today. It was better than expected.
But really the keyping that drove the sheep price up
was up fifteen percent today to eighty one cents was
a sale of its North Iron assets to Abbott for
just ever three and a million. That that is a

(01:36):
really helpful combining that with a bit of better cash
flow and it actually takes care of most of Cinela
is dead at the moment. They haven't provided guidance. Management
didn't provide guidance, but they did talk about previous manufaction
problems they pretty much resolved and they're actually seeing a
strong customer demand. So a much better day for Sinlay.

Speaker 1 (01:53):
Now.

Speaker 2 (01:53):
We've been speaking to Nicola Willis just before about the
energy market report out this week. What's the market expecting?

Speaker 3 (02:00):
Yeah, so market sectually relev keyfully optimistic is probably the
best oputant. So we've got the government due to announce
at surgul intervention charges hopefully on Wednesday, and it's the
end of the month. That's what they've said, and based
on recent minister's comments, the market's expecting changes to be
pretty much common sense adjustments rather than major interventions, and

(02:21):
that days these are announcements on Wednesday won't really materially
impact their current share prices or their company valuations. What
we are watching for the heather is measures that address
things like gas shortages, including potential for gas imports, some
improved transparency on hedging and assistance for retail market, some
discussion about hydro storage, about contingent hydro storage, and anything

(02:43):
that really streamlines this resource consenting process. That while the
market's not expecting big shocks, there's a lot of focus
on you know, is it going to be just that?
Is it going to be a little bit of common sence?

Speaker 2 (02:53):
Yeah, brilliant so has Shane has always good to talk
to you. Thanks mate, Shane Soley, Thanks Harboraccit Management.

Speaker 1 (02:59):
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