Shares in New Zealand’s Synlait Milk rose sharply on Friday after it said it expects to turn a profit in the 2025 financial year thanks to rising demand for nutritional products and cost-cutting measures, and forecast higher profits in the first half of the year, DairySite reports.
Last year, dairy giant Synlait initiated a strategy overhaul that helped it turn around despite early setbacks such as additional spending and the scrapping of its 2024 fiscal year guidance.
Synlait shares jumped 26.2% to NZ$0.53 ($0.30) – likely on their best trading day since August 21, 2024. The benchmark NZX 50 index was down 0.3% at 2229 GMT.
The company focused on cost control and reduced consultancy costs, streamlined operations and improved asset utilisation in the North Island, which resulted in significant savings, the statement said.
A year earlier, the company reported a profit before all costs of NZ$19.9 million ($11.29 million).
The updated guidance “gives investors and the market some confidence and some belief in the company’s ability to continue to operate,” said Grady Wolfe, a market analyst at online trading platform Bell Direct.
Synlait also said it had set additional milk premiums for the next three seasons to maintain supply in the South Island, and would pay NZ$0.10 ($0.06) per kilogram of milk solids until the 2027/28 season.
These premiums will be paid on top of the base milk price – the amount Synlait pays farmers – and in addition to specialty milk incentives and other supplier-focused programs such as Lead With Pride.
Synlait has raised its base milk price four times in the past year, most recently in December. The base milk price is now NZ$10 ($5.68) per kilogram of dry matter.
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