Synlait updates FY21 guidance, expects up to $30m loss
The board and management have undertaken a review of the impact of previously disclosed risks affecting Synlait’s performance, and as a result, the company has altered its full year forecast based on: an expectation of ongoing shipping delays, which will result in the sale of some ingredient products occurring post the FY21 balance date; achieving lower prices for ingredient products than Synlait would normally expect to achieve relative to prevailing market prices through a combination of sales phasing and volume pressure; and the adoption of a more conservative approach to year-end inventory volumes and valuation.
Synlait now expects to make a net profit after tax loss of between NZ$20m to NZ$30m (US$14.5m to US$21.7m) in FY21.
Synlait said its banking syndicate continues to be supportive and has granted a waiver of relevant covenants in FY21. The company is working with the syndicate to ensure it has the appropriate funding for FY22. Synlait does not intend to undertake a capital raising.
Synlait CEO John Penno said, “I am disappointed to share this news with our investor base. As a team we are focused on closing out this year as well as we can, then resetting, and delivering a much-improved financial performance in FY22.”
