March 24, 2025 • 6 mins
A return to profit for troubled Canterbury milk processor Synlait.
Its half-year result to January's end shows earnings of $63 million before interest, taxes, and depreciation.
It follows a tough 2024 for Synlait, which saw a shareholder bailout via a $218 million capital raise to repay debt.
Acting Chief Executive Tim Carter explains how the company managed to bounce back.
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Episode Transcript
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Speaker 1 (00:00):
Right now though. It is the story of Sindlay. The
dairy company has shaken off its troubles from twenty twenty
four and returned to profitability four point eight million dollars.
That is the profit it's posted for the first half
of the year. That compares pretty favorably with the ninety
six point two million dollar loss the company posted last year.
Tim Carter is the acting CEO. He's with me now,
(00:22):
High Tim, Hey, Ran, how are you good? Thank you?
So it's been a very troubling time for you guys.
This must be a welcome result, albeit a modest one.
Speaker 2 (00:32):
Yeah. Look today as really as a positive news day
for Cinley. We've announced the return to profitability in the
first half, as you've mentioned, and given the position Sinley
was in twelve months ago, this really is a considerable
commercial achievement and something we're really proud of.
Speaker 1 (00:47):
How did you do it?
Speaker 2 (00:49):
Look a heck of a had a lot of hard
works gone in but probably four key areas of focus.
Our advance nutrition demand has been really strong, which is
really pleasing. That's really helped I think our North Onland asset,
which has been a real drag on the p and
l over the years, we've started to optimize that and
although there's a long way to go, that's certainly certainly
(01:10):
reduced the losses. So that certainly helped, you know, training
conditions across commodities globally. The lead bucket that we talked about,
the skim and fat lead bucket, that's there along with
FX as has been the other driver, and the fourth
one is just prudent cost management. You know, we're really
focused on that era in our business and making sure
(01:31):
that they were optimizing spend and optimizing our operation.
Speaker 1 (01:34):
In particular, you mentioned the North Island asset drag. I'm
assuming you're referring to Pocono what's happening with it.
Speaker 2 (01:41):
So look, you know, the big fix there, Ryan is
all about volume and new customers, and so what we're
be enough to do is really target that plant for
advanced nutrition. And what that's meant is we we've no
longer taken a raw milk into that facility. By doing that,
it's allowed us to reset our cost space. And right
side that, what we've also done is through new customers,
(02:03):
we've got a little bit more volume through that plant,
and so that's certainly helping us. As I said, the
real silver bottlers, get more volume through that plant, the
efficiencies will come and then we ideally we want to
get that into a positive contributing factory.
Speaker 1 (02:17):
Yeah, does it make sense to have it as a
non milk product factory.
Speaker 2 (02:22):
Yeah? Absolutely, you know right now that is the right
option for us. As I said, it stops the decline
or stops the losses or reduces them. So that is
the right decision. And look, we look at our customer
based on our new business development in particular, we bring
that in and through a funnel. And look, we have
some really good customers that we're qualifying right now, but
(02:43):
I think in twenty twenty six if we can realize
them and that demand, some of that volume will go
through there. So it absolutely makes sense.
Speaker 1 (02:50):
For now you've said, and you said it reduces the losses,
not stops the losses. So presuming it's still loss making,
is it for sale? Would you sell?
Speaker 2 (02:59):
Look like anything? Right now, we're not actively selling it,
but sure if a credible offer came in, would certainly
recommend the board considerate. But you know that's more of
a hope strategy right now. As management, our job is
to increase the demand, optimize the cost, base and get
it back to profit.
Speaker 1 (03:17):
Fair enough. Now let's talk about the suppliers. How many
suppliers are still wanting to get out.
Speaker 2 (03:25):
Yeah, So I think what's interesting there our farmer progress
is you go back six months ago, we probably had
a milk crisis. Right now we're in a really good
position when we look at the twenty sixth season. You know,
we have ample milk next year coming our way when
we go to twenty seven and we can now say
that we have a majority of our milk in the
South Island no longer undersease, which is really promising. And
(03:48):
we also have a lot of interest from new milk
down here in the South Island, whether that's coming from
existing farms with different processes or interesting enough conversions. There
seems to be a few conversions in the pipeline down
here as well, and that really interested in our in
our offer and what's something they can do for them. So,
you know, we're really confident we have momentum. What's really
(04:12):
important for those farmers that that have that are still
under ceased was today's announcement. You know, the feedback has
been that, you know, we just want to know that
that you're doing well. You're back on track and is
the future. So you know, this announcement today will certainly help.
That will help give those farmers confidence. And we're looking
forward to the next week and seeing those cease ceases
(04:32):
being pulled over the over that period.
Speaker 1 (04:33):
Do you that's what you're hoping will happen. Have you
had any indication yet since announcing today's result that that
will happen?
Speaker 2 (04:41):
Yeah? Absolutely, And you know, every every hour, every day, Ryan,
that number of changes in terms of what's coming. And
so we are very confident in terms of those ceases.
And remember we have a majority right now that is
not under cease. It's about closing out the rest.
Speaker 1 (04:56):
Okay, And what about Donald Trump? Do you lie wake
at worrying about him and his agricultural tariffs?
Speaker 2 (05:03):
Yeah? Absolutely, I think you know there's so much under
on there, Ryan, But is you know what is going
to happen around taris what does that mean globally? And
then what does that mean for supply and demand? You know,
everything from tariffman in US probably even through the foot
and mouth out of Europe. And what does that mean
and if that spreads further, what can that do to
(05:24):
mill flows in Europe? And then ultimately what does that
do for supply globally? So those are all I think
anymal process in New Zealand right now I was watching that.
I think we're well placed to navigate that, but it
is obviously an ongoing concern coming.
Speaker 1 (05:37):
This is first half, Obviously second half looking not well.
Things aren't looking great for the full year. Would it
be fair to say no.
Speaker 2 (05:45):
No, I don't think that's fair to say. I think
what we're what we're trying to say here Ryan is look,
the second half won't be quite as strong as the
first half, but overall the EBITDA performance for the full
year will be a significant improvement year on year, and
I think that's really important. You know, we do have
some headwinds, so talk about the mickstream returns that swapped
from a skimm and fat lead bucket through to a
(06:08):
whole book lead bucket, and so that just presents a
few headed winds. But the key messages is the end
of year is still looking really really promising. It just
won't be as strong as the first stuf.
Speaker 1 (06:18):
All right, Tim, Nice wrapping with you there. Tim Carter,
acting sin Lea's CEO with us returning to profit.
Speaker 2 (06:24):
For more from Heather Duplessy Allen Drive.
Speaker 1 (06:26):
Listen live to news talks.
Speaker 2 (06:28):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio
Right now though. It is the story of Sindlay. The
dairy company has shaken off its troubles from twenty twenty
four and returned to profitability four point eight million dollars.
That is the profit it's posted for the first half
of the year. That compares pretty favorably with the ninety
six point two million dollar loss the company posted last year.
Tim Carter is the acting CEO. He's with me now,
(00:22):
High Tim, Hey, Ran, how are you good? Thank you?
So it's been a very troubling time for you guys.
This must be a welcome result, albeit a modest one.
Speaker 2 (00:32):
Yeah. Look today as really as a positive news day
for Cinley. We've announced the return to profitability in the
first half, as you've mentioned, and given the position Sinley
was in twelve months ago, this really is a considerable
commercial achievement and something we're really proud of.
Speaker 1 (00:47):
How did you do it?
Speaker 2 (00:49):
Look a heck of a had a lot of hard
works gone in but probably four key areas of focus.
Our advance nutrition demand has been really strong, which is
really pleasing. That's really helped I think our North Onland asset,
which has been a real drag on the p and
l over the years, we've started to optimize that and
although there's a long way to go, that's certainly certainly
(01:10):
reduced the losses. So that certainly helped, you know, training
conditions across commodities globally. The lead bucket that we talked about,
the skim and fat lead bucket, that's there along with
FX as has been the other driver, and the fourth
one is just prudent cost management. You know, we're really
focused on that era in our business and making sure
(01:31):
that they were optimizing spend and optimizing our operation.
Speaker 1 (01:34):
In particular, you mentioned the North Island asset drag. I'm
assuming you're referring to Pocono what's happening with it.
Speaker 2 (01:41):
So look, you know, the big fix there, Ryan is
all about volume and new customers, and so what we're
be enough to do is really target that plant for
advanced nutrition. And what that's meant is we we've no
longer taken a raw milk into that facility. By doing that,
it's allowed us to reset our cost space. And right
side that, what we've also done is through new customers,
(02:03):
we've got a little bit more volume through that plant,
and so that's certainly helping us. As I said, the
real silver bottlers, get more volume through that plant, the
efficiencies will come and then we ideally we want to
get that into a positive contributing factory.
Speaker 1 (02:17):
Yeah, does it make sense to have it as a
non milk product factory.
Speaker 2 (02:22):
Yeah? Absolutely, you know right now that is the right
option for us. As I said, it stops the decline
or stops the losses or reduces them. So that is
the right decision. And look, we look at our customer
based on our new business development in particular, we bring
that in and through a funnel. And look, we have
some really good customers that we're qualifying right now, but
(02:43):
I think in twenty twenty six if we can realize
them and that demand, some of that volume will go
through there. So it absolutely makes sense.
Speaker 1 (02:50):
For now you've said, and you said it reduces the losses,
not stops the losses. So presuming it's still loss making,
is it for sale? Would you sell?
Speaker 2 (02:59):
Look like anything? Right now, we're not actively selling it,
but sure if a credible offer came in, would certainly
recommend the board considerate. But you know that's more of
a hope strategy right now. As management, our job is
to increase the demand, optimize the cost, base and get
it back to profit.
Speaker 1 (03:17):
Fair enough. Now let's talk about the suppliers. How many
suppliers are still wanting to get out.
Speaker 2 (03:25):
Yeah, So I think what's interesting there our farmer progress
is you go back six months ago, we probably had
a milk crisis. Right now we're in a really good
position when we look at the twenty sixth season. You know,
we have ample milk next year coming our way when
we go to twenty seven and we can now say
that we have a majority of our milk in the
South Island no longer undersease, which is really promising. And
(03:48):
we also have a lot of interest from new milk
down here in the South Island, whether that's coming from
existing farms with different processes or interesting enough conversions. There
seems to be a few conversions in the pipeline down
here as well, and that really interested in our in
our offer and what's something they can do for them. So,
you know, we're really confident we have momentum. What's really
(04:12):
important for those farmers that that have that are still
under ceased was today's announcement. You know, the feedback has
been that, you know, we just want to know that
that you're doing well. You're back on track and is
the future. So you know, this announcement today will certainly help.
That will help give those farmers confidence. And we're looking
forward to the next week and seeing those cease ceases
(04:32):
being pulled over the over that period.
Speaker 1 (04:33):
Do you that's what you're hoping will happen. Have you
had any indication yet since announcing today's result that that
will happen?
Speaker 2 (04:41):
Yeah? Absolutely, And you know, every every hour, every day, Ryan,
that number of changes in terms of what's coming. And
so we are very confident in terms of those ceases.
And remember we have a majority right now that is
not under cease. It's about closing out the rest.
Speaker 1 (04:56):
Okay, And what about Donald Trump? Do you lie wake
at worrying about him and his agricultural tariffs?
Speaker 2 (05:03):
Yeah? Absolutely, I think you know there's so much under
on there, Ryan, But is you know what is going
to happen around taris what does that mean globally? And
then what does that mean for supply and demand? You know,
everything from tariffman in US probably even through the foot
and mouth out of Europe. And what does that mean
and if that spreads further, what can that do to
(05:24):
mill flows in Europe? And then ultimately what does that
do for supply globally? So those are all I think
anymal process in New Zealand right now I was watching that.
I think we're well placed to navigate that, but it
is obviously an ongoing concern coming.
Speaker 1 (05:37):
This is first half, Obviously second half looking not well.
Things aren't looking great for the full year. Would it
be fair to say no.
Speaker 2 (05:45):
No, I don't think that's fair to say. I think
what we're what we're trying to say here Ryan is look,
the second half won't be quite as strong as the
first half, but overall the EBITDA performance for the full
year will be a significant improvement year on year, and
I think that's really important. You know, we do have
some headwinds, so talk about the mickstream returns that swapped
from a skimm and fat lead bucket through to a
(06:08):
whole book lead bucket, and so that just presents a
few headed winds. But the key messages is the end
of year is still looking really really promising. It just
won't be as strong as the first stuf.
Speaker 1 (06:18):
All right, Tim, Nice wrapping with you there. Tim Carter,
acting sin Lea's CEO with us returning to profit.
Speaker 2 (06:24):
For more from Heather Duplessy Allen Drive.
Speaker 1 (06:26):
Listen live to news talks.
Speaker 2 (06:28):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio
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