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Synlait Milk Ltd.
(SML)
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Rating:46Neutral
Price Target:
$0.40
▼(-5.48% Downside)
Action:N/A
Date:10/05/26
The score is held down primarily by weak financial performance—continued losses, extremely thin gross margins, and heavy negative operating/free cash flow. Technicals are neutral with modest short-term stabilization but a longer-term downtrend. The earnings call adds some support due to clear second-half improvement and balance-sheet strengthening, though the lack of near-term guidance and ongoing cash burn keep overall risk elevated.
Positive Factors
Deleveraging and balance-sheet simplification
The North Island sale materially simplified Synlait’s asset base and reduced net debt, improving financial flexibility after a highly leveraged period. Lower borrowings and financing costs should ease balance-sheet pressure and give management more capacity to fund operational recovery over the next several quarters.
Negative Factors
Persistent losses and weak margin resilience
Synlait remains structurally unprofitable despite improvement from the prior year. The steep revenue contraction and extremely thin gross margin leave little protection against input costs, pricing pressure, or under-absorbed fixed costs, making earnings recovery dependent on sustained operational and product-mix improvement.
Read all positive and negative factors
Positive Factors
Negative Factors
Deleveraging and balance-sheet simplification
The North Island sale materially simplified Synlait’s asset base and reduced net debt, improving financial flexibility after a highly leveraged period. Lower borrowings and financing costs should ease balance-sheet pressure and give management more capacity to fund operational recovery over the next several quarters.
Read all positive factors
Synlait Milk Ltd. (SML) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$244.30M
Dividend YieldN/A
Average Volume (3M)51.52K
Price to Earnings (P/E)―
Beta (1Y)-0.08
Revenue Growth-7.94%
EPS Growth-95.77%
CountryNZ
Employees549
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)-0.12
Shares Outstanding603,198,100
10 Day Avg. Volume54,465
30 Day Avg. Volume51,516
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)0.33
Price to Sales (P/S)0.14
P/FCF Ratio-0.94
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Synlait Milk Ltd. Business Overview & Revenue Model
Company Description
Synlait Milk Limited, alongside its associated entities, creates and markets a diverse portfolio of dairy products, serving international territories including China, the wider Asian region, the Middle East, Africa, Australia, and its home base of...
How the Company Makes Money
Synlait primarily makes money by converting raw milk into higher-value dairy and nutrition products and selling those products to customers under contract and/or through ingredient supply arrangements. Key revenue streams include: (1) Dairy and nu...
Synlait Milk Ltd. Earnings Call Summary
Earnings Call Date:Sep 27, 2026
(Q4-2026)
| Next Earnings Date:Mar 29, 2027
Earnings Call Sentiment Positive
The call presented a cautiously positive recovery narrative. Although FY '26 included substantial losses, negative operating cash flow, segment-level gross profit declines and a significant volume transition from a2 Milk, management emphasized strong second-half operational and financial improvement, lower debt, completion of the North Island sale, customer and market diversification, and confidence in covenant compliance and continued recovery.Positive Updates
Second-Half Operational and Financial Recovery
Operations stabilized in the second half, with reported EBITDA improving by $77.5 million, underlying EBITDA improving by $38.1 million, reported net profit after tax improving by $85.8 million, and underlying net profit after tax improving by $33 million.
Negative Updates
Significant Full-Year Net Loss
FY '26 remained financially difficult. Synlait reported a net loss after tax of $75.4 million and an underlying net loss after tax of $21.6 million. The first half included an EBITDA loss of $34.7 million and a net loss after tax of $80.6 million.
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Q4-2026 Updates
Positive
Negative
Second-Half Operational and Financial Recovery
Operations stabilized in the second half, with reported EBITDA improving by $77.5 million, underlying EBITDA improving by $38.1 million, reported net profit after tax improving by $85.8 million, and underlying net profit after tax improving by $33 million.
Read all positive updates
Company Guidance
Synlait said it is not providing guidance for the 5 months ending 31st of December 2026, describing FY '26 as a 5-month transitional period; it expects milk supply to be 3% to 6% more than budget, expects a new Middle East customer to represent 18% of our FY '27 capacity, expects 3 years time to fully backfill capacity or demand, and said nutritional customer volumes normally take 2 to 3 years to get the peak volume. Management said it expects a big volume growth already in 2027, is confident it will continue the improvement in the second half, feels comfortable or confident it will meet bank covenant compliance, and will review its position on guidance at the end of this year and get back to the markets probably early February.Synlait Milk Ltd. Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
55
Neutral
Cash Flow
18
Very Negative
| Breakdown | Jul 2026 | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.68B | 1.83B | 1.64B | 1.32B | 1.40B |
| Gross Profit | 32.71M | 105.34M | 102.30M | 103.40M | 117.18M |
| EBITDA | -28.44M | 30.22M | -130.35M | 63.19M | 94.27M |
| Net Income | -75.44M | -39.82M | -182.11M | -4.29M | 38.52M |
Balance Sheet | |||||
| Total Assets | 1.40B | 1.56B | 1.49B | 1.71B | 1.60B |
| Cash, Cash Equivalents and Short-Term Investments | 18.71M | 78.28M | 10.27M | 9.29M | 14.49M |
| Total Debt | 277.81M | 384.07M | 615.03M | 469.62M | 383.53M |
| Total Liabilities | 694.95M | 775.09M | 889.22M | 921.39M | 852.47M |
| Stockholders Equity | 708.43M | 788.79M | 604.80M | 790.37M | 748.40M |
Cash Flow | |||||
| Free Cash Flow | -245.82M | 142.59M | -78.09M | -70.05M | 110.78M |
| Operating Cash Flow | -218.09M | 165.52M | -47.19M | -4.96M | 207.04M |
| Investing Cash Flow | 259.52M | -22.62M | -29.63M | -62.26M | -65.79M |
| Financing Cash Flow | -101.01M | -74.90M | 76.77M | 62.97M | -143.12M |
Synlait Milk Ltd. Technical Analysis
Neutral
0.42
Price Trends
0.39
Positive
0.40
Positive
0.46
Negative
Market Momentum
<0.01
Negative
51.34
Neutral
56.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NZ:SML, the sentiment is Neutral. The current price of 0.42 is above the 20-day moving average (MA) of 0.40, above the 50-day MA of 0.39, and below the 200-day MA of 0.46, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 51.34 is Neutral, neither overbought nor oversold. The STOCH value of 56.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NZ:SML.
Synlait Milk Ltd. Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $5.99B | 25.89 | 17.63% | 7.73% | 3.84% | 6.53% | |
67 Neutral | $99.98M | 7.56 | 9.98% | 1.90% | 10.67% | ― | |
66 Neutral | $598.44M | 8.18 | 9.48% | 1.84% | -4.16% | 91.88% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
54 Neutral | $129.16M | -13.78 | -4.98% | 5.79% | ― | ― | |
46 Neutral | $244.30M | -3.62 | -10.58% | ― | -7.94% | -95.77% | |
46 Neutral | $10.76M | -3.38 | ― | ― | -12.36% | 79.80% |
* Consumer Defensive Sector Average
NZ:SML
Synlait Milk Ltd.
0.41
-0.40
-49.69%
NZ:ATM
a2 Milk Company
8.15
-1.30
-13.79%
NZ:CVT
Comvita
0.75
<0.01
0.40%
NZ:NZK
New Zealand King Salmon Investments
0.25
0.04
16.67%
NZ:SAN
Sanford
6.38
0.64
11.17%
NZ:MEE
Me Today Limited
0.10
0.03
45.59%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.