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 (00:00):
Shane solely harbor Asset Management is with us.

Speaker 2 (00:02):
Hello Shane ton Quai here, how are you very well?

Speaker 1 (00:06):
Thank you? Busy day for the dairy sector announcements today.
So you had an announcement from Fontira.

Speaker 2 (00:11):
Yeah. So Fontira is obviously sold mainland group business to Talas,
one of the big global groups, and it announced a
supply arrangement with them today. Basically a ten year raw
milk supply deal allows both parties after seven years to
chop out with a thirty six month notice keeping. Here
is a good price for farm and still based price
of farm gate price plus some undisclosed premiums link to

(00:34):
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 three and and fifty
million leaders, similar levels of activity between the two groups
and terms of Finnish goods as well, all up a
little a little bit of a support for the Fontira
ship race up half a percent to seven ninety five today.
That's the Fontier shield.

Speaker 1 (00:56):
Of fund Sorry, okay. And what about Sinnay?

Speaker 2 (00:58):
Yeah, so sin Lay obviously been under pressure with rather
than high levels of 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 sheer price up was
up fifteen percent today to eighty one cents was a
sale of its North Islan assets to Abbott for just
ever three in a million. That that is a really

(01:19):
helpful combining it with a better cash flow, and it
actually takes care of most of SILA is dead at
the moment. They haven't provided guidance. Management didn't provide guidance,
but they did talk about previous manufacturing problems they've pretty
much resolved and they're actually seeing a strong customer demand.
So a much better day for Sinlay.

Speaker 1 (01:36):
Now. We've been speaking to Nicola Willis just before about
the energy market report out this week. What's the market expecting?

Speaker 2 (01:43):
Yeah, so market's actually real The keyfully optimistic is probably
the best oputant. So we've got their government due to
announce at surgiwin divention 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 markets expect been changes
to be pretty much common sense adjustments rather than major interventions,

(02:04):
and 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

(02:26):
anything that really streamlines this resource consenting process. That while
the market's not expecting big shocks, there's a lot of
focus on is it going to be just that? Is
it going to be a little bit of common sence?

Speaker 1 (02:37):
Yeah, brilliant stuff has Shane has always good to talk
to you. Thanks mate, Shane Soley, Thanks Harberaccit Management. For
more from Heather Duplessy Allen Drive, listen live to news talks.

Speaker 2 (02:46):
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