The Synlait Milk Ltd (ASX: SM1) share price has jumped 16% after reporting its FY25 result and revealing an asset sale.
Synlait says it works with over 220 milk suppliers to create high-quality milk nutrition for its global customers.
Synlait FY25 result
Here are some of the highlights from the 12 months to 31 July 2025:
- Revenue increased by 11.6% to $1.83 billion
- Gross profit grew $49 million to $105 million
- EBITDA (EBITDA explained) improved $55 million to $51 million
- EBIT rose $177 million to a loss of $6 million
- Net profit after tax (NPAT) increased $142 million to a loss of $40 million
- Operating cashflow jumped $213 million to $166 million
Synlait revealed a turnaround in its ingredients business from a $13.5 million loss to a gross profit of $13.1 million.
It also highlights a 29% increase in its advanced nutrition business’ gross profit to $95 million.
Synlait also highlighted a 92% rise in its foodservice production volume, with improved margins, though further gains are required to deliver profitability.
The company also noted a 28% rise in its consumer business unit’s gross profit to $39 million, thanks to growth in export markets including entry to Thailand and Vietnam.
Synlait also announced a 55% reduction in its net debt from $551.6 million to $250.7 million.
Asset sale
Synlait announced the sale of its North Island assets to a customer and global healthcare leader – Abbott.
The divestment will deliver approximately NZ$307 million for Synlait.
The Pokeno manufacturing facility, along with the assets at the Auckland sites of the blending and canning facility on Richard Pearse Drive and the Warehouse facility on Jerry Green Street, and associated inventory and leasehold arrangements.
The target completion date is 1 April 2026, with the sale subject to various conditions, including approvals and consents.
Outlook for the Synlait share price
The company said the asset sale will strengthen the company’s financial position and the proceeds will be used to significantly reduce debt.
This will also enable the company to refocus on its core operations in Canterbury. It also said that there will be a renewed emphasis on operational stability at its Dunsandel facility, which will asset in driving longer-term profitability. Continued growth in the Dairyworks business will also support the focus.
However, the company will not provide further financial guidance for FY26, though it said it aims to have an updated strategic plan in place by March 2026.
The Synlait share price has already jumped in response, so it’s not as cheap as it was. I don’t know how successful the business will be going forwards, so I’m cautious on investing today.
