New Synlait CEO Leon Fung Commits to Christchurch Move
Canterbury milk processor Synlait has come through tough times and is now ready to scale up from a stable base, says its newly confirmed CEO Leon Fung.
In an announcement to the NZX this morning, Synlait said it would lift its forecast to $8.60/kgMS, up from $8/kgMS.
Despite this increase, the milk processor says it will continue to take a ‘conservative’ approach to its 2024/25 forecast due to exposure to what it describes as volatile future dairy commodity prices earlier in the season.
“Retention of Synlait’s milk supply remains a critical priority for the company,” the statement says. “Synlait is committed to delivering a competitive milk price and advanced rate profile, which has also been lifted for 2024/2025 to ensure the company’s on-farm offering remains attractive to farmer suppliers.”
Synlait says it will continue to monitor future forecast movements and its final milk price for the 2023/24 season will be confirmed when the company’s full-year results are revealed at the end of this month.
The announcement comes just two weeks after Fonterra announced its new forecast range of $7.75 - $9.25/kgMS, meaning a midpoint of $8.50/kgMS.
It also comes as Synlait attempts to pass a recapitalisation plan which would see $218 million in shares offered to its two largest shareholders, Bright Dairy of China and the a2 Milk Company (a2MC).
Currently, Bright Dairy owns 39% of Synlait but under the deal that would increase to approximately two thirds of the listed company. Meanwhile, a2MC would retain its 19.83% stake.
A special shareholder meeting has been scheduled for September 18 to confirm the recapitalisation.
