SML - Synlait Milk Ltd

[winner69]

Suppose big end of town already left for the beach or where ever .....hardly any reaction to the massive downgrade

Suppose a huge sigh of relief for holders

Even from where it was last week share price holding up well

[ratkin]

They should have milked the shareholders for more money when they had the chance. Still very high debt levels, especially with a slowdown. Hard to see much reason to invest right now. Headwinds and no clear blue sky

[Beagle]

37m on 218.5m shares = 16.9 cps. What's the bet they will use a weighted average shares on issue for the year when calculating eps !...but the dog does not suffer such creative nonsense.

[Balance]

Suppose big end of town already left for the beach or where ever .....hardly any reaction to the massive downgrade

Suppose a huge sigh of relief for holders

Even from where it was last week share price holding up well

Wait for when ASX opens.

Like ATM on Friday, that's when the real price action started.

[winner69]

I always thought this was the most stupid heading ever for an NZX Announcement ... and said something about management culture

From the 2018 ASM

IMPRESSIVE RESULT APPLAUDED BY SHAREHOLDERS

Pink doesn't stand out

Don't think a standing ovation next year

[Beagle]

I always thought this was the most stupid heading ever for an NZX Announcement ... and said something about management culture

From the 2018 ASM

IMPRESSIVE RESULT APPLAUDED BY SHAREHOLDERS

Pink doesn't stand out

Don't think a standing ovation next year

Next year they will wax lyrical about their other two equally important goals, people and the planet and shareholders will "enjoy" reading endless commentary about how well they've done there and their wonderful new diversity programs. Shareholders are on for a really "fun" ride.

Notice how during the shareholder capital raise / milking they pretended that profit really did matter ! Shareholders really have been milked.

I think a three legged blind pig dog riddled with mange, fleas and ticks is more attractive than this mutt.

[mcdongle]

yes I made a mistake on this company but took the hit way back at $10. very glad now.
powdered milk goes off too.

I am told the way Synlait stores it they can run it through again to freshen it up.....obviously this costs money

[Ferg]

I think a three legged blind pig dog riddled with mange, fleas and ticks is more attractive than this mutt.
Haha, thanks for the laugh.

Does SML disclose total sales to A2? Per the annual reports they make reference to wanting less reliance ion A2 and their strategy is to diverse away from "one country, one customer, one production site" which they are achieving via acquisition, and possibly other methods of which I am unaware. The only references I can find for A2 sales all relate to tinned infant formula which makes up 33% of total metric tonnes sold in 2020 and 29% in 2019.

[peat]

I am told the way Synlait stores it they can run it through again to freshen it up.....obviously this costs money

hahah I wasnt being literal at all , but my flippant facetious comment might but have some relevance after all!

[Beagle]

Haha, thanks for the laugh.

Does SML disclose total sales to A2? Per the annual reports they make reference to wanting less reliance ion A2 and their strategy is to diverse away from "one country, one customer, one production site" which they are achieving via acquisition, and possibly other methods of which I am unaware. The only references I can find for A2 sales all relate to tinned infant formula which makes up 33% of total metric tonnes sold in 2020 and 29% in 2019.

You're welcome mate, its not called the silly season for no good reason ;) Not sure, probably commercially sensitive, but going off this announcement a 35% reduction in demand from ATM leads to a 50% profit downgrade for Synlait suggests to me the vast majority of Synlait's processing is for ATM.

Once the big end of town are back from their holiday's at their waterfront properties at Pauanui and Omaha beaches I think we will see the shares coming under serious pressure.

[DownTownJr]

I'm surprised with how well SML sp is holding out today, I thought it would get somewhat smashed.

[Beagle]

Beggars belief. What a ripper short this should make for anyone that can get the position on.

[Sideshow Bob]

You could be almost forgiven for thinking they'd announced an earnings downgrade this morning. Almost back to $5 bucks! :scared:

[Beagle]

:eek2: Half of the year has already happened and they are now saying profit will halve for the whole year and that's on heaps more shares just issued :eek2:...and yet the share price is up....go figure that one !! On top of that what if ATM go ahead with their Mataura Valley acquisition ? That will surely mean even less business for Synlait in FY22 for all of that year, (not just 6 months drop off in demand this year).

[Cash_Lion]

Why is everyone so bearish here... This is obviously only due to COVID impacts on the supply chain. Vaccines are out... When things return back to normal and production with new big customer begins Synlait should see $10+ share price in no time

[Sideshow Bob]

Why is everyone so bearish here... This is obviously only due to COVID impacts on the supply chain. Vaccines are out... When things return back to normal and production with new big customer begins Synlait should see $10+ share price in no time

Maybe worth making a case on the positives and why should see them $10+?

Currently it appears much of their margin is tied to A2 volumes and sales.

[Ggcc]

I think there are a lot of people who forget COVID is around. The world around us and yet we struggle to understand from our little country NZ. People do not understand that we are struggling to import and export things. We have got new cars, but it takes a month to get a new transmission imported from Australia. We can buy a boat, but if we need engine parts we need to wait for a while. We are in a new area and ATM and SML are in territory unknown.

I have a business and I have years of experience in this industry (hospitality) and yet I am in unmarked territory. I am guessing what is happening week to week and I am trying to keep staff happy and make sure they have incomes yet my business can sometimes make monthly losses. That is something new to me and I am adapting as well. As I have always made monthly profits in the past. We need to all look at the future and not the present for stability.

[Ferg]

I'm trying to get my head around revenues and/or volumes from customers other than A2 for SML. Apologies in advance for the long post.

Summary, in my estimates:

A2 make up about 84% of total milk sales, excluding cheese
A2 projected to be around 80% of total $ sales after recent acquisitions
Recent cheese acquisitions gave a GP contribution before overheads of 3.4% of the cost of investment vs cost of external finance 3.49%
I estimate Liquid Milk production is running at about 25% utilisation => white elephant with return lower than the cost of external finance unless other customers can be found urgently
Increasing inventories are likely due to cheese which will put pressure on working capital, as total volumes and cost/MT are both increasing.



Background
Per the AR2019 p8 Chair Review: "Our current business can be fairly described as essentially focused around one sector, one market and one customer, that being infant formula for China via The a2 Milk Company." It take this to mean the VAST majority (99%+?) of sales are to A2.

SML invested $134m (AR2019, p6, 8 & 11) to expand the production facilities at Dunsandel to process liquid milk for their first customer, Foodstuffs South Island in early April 2019 (AR2019 p8, 11, 14). They also invested $37.8m acquiring Talbot Forest Cheese Ltd (AR2019 p55).

Per the AR2019 CFO Review p14: "This year we commissioned our advanced liquid dairy packaging facility at Dunsandel supplying Foodstuffs South Island. The plant was commissioned in early April, and in the four months following, the facility produced 8,840,469 litres. Gross profit from fresh milk was ($3.5 million) reflecting some initial commissioning challenges and low fixed overhead recoveries. In FY20 we expect to stabilise performance and bring it back in line with expectations."

Liquid Milk Volumes
Assuming the plant opened 6 April 2019, that gives a maximum 117 days of production. 8.84m litres produced equates to 75,560 litres produced per day. Extended over a year that gives an indication of Foodstuffs SI demand of 27.58m litres per annum. Per AR2020 p14 the production capacity is "110ML" which I assume to mean 110m litres per annum. Without any other customers, or change in demand from the sample period April-July 2019, this gives a utilisation rate of 25% (being 27.58/110). It's no surprise SML needs to find other liquid milk customers...!

The company reported total sales of 149,730MT in 2019 and 150,432MT in 2020 (AR2020 p24) with a note at the bottom stating "Synlait Milk Limited only and fresh milk is excluded in FY20 and FY19 (part year in FY19)". I am assuming MT is metric tonnes and it appears these are whole numbers, not thousands or millions.

1 litre of milk averages around 1.03kg plus or minus depending on the fat content. Assuming 116 of 117 days liquid milk production in 2019 was sold (assuming what is produced today is sold tomorrow), that equates to around (75,560 x 116 * 1.03/1000) 9,028MT of liquid milk sales. As a percentage of total tonnage sold this would imply (149,730/158,758) 94% of total milk volume sales in 2019 were to A2, excluding cheese.

Extending this to 2020, let's assume liquid milk sales of 75,560 x 366 x 1.03/1000 = 28,485MT. As a percentage of total milk sales (excluding cheese, and assuming the remainder is A2) this implies A2 is 84% of total milk volumes sold (being 150,432/178,917).

Cheese & Liquid Milk Impact
Dairyworks Ltd was also acquired 1 April 2020 at a cost of $112m (p60 AR2020) which further muddies the waters.

What is interesting to note is this comment from AR2020 p25: "The Everyday Dairy category represents the acquisition of Talbot Forest Cheese and Dairyworks, along with the Advanced Dairy Liquid Packaging Facility at Dunsandel. Gross Profit from this area is net $0.4 million, a result reflecting some initial commissioning challenges in the Advanced Dairy Liquid Packaging Facility at Dunsandel and low fixed overhead recoveries as we move from commissioning phase to a focus on increasing utilisation. Dairyworks and Talbot Forest Cheese are tracking to expectations generating Gross Profit of $2.6 million combined in FY20."

Is the $0.4m the total GP for just liquid milk from Dunsandel? Or is it the 3 business units combined which would imply a GP loss for liquid milk - surely not? Either way, that is a far cry from the $3.5m reported for the 4 months ended July 2019. A GP contribution of $0.4m on an investment of $134m is risible. It is likely the GP was slaughtered by increased depreciation and wage costs which form part of Cost of Sales (AR2020 p37) but what explains the rest of it - lower volumes?

Furthermore, if the GP for Talbot and Dairyworks combined is $2.6m on an investment of (118 + 37.8) $155.8m then that is a contribution before fixed costs of 1.7%. Admittedly Dairyworks is only 4 months so adjusting the investment (not the GP given it is not disclosed), gives a contribution before overheads of 2.6 / (118/3 + 37.8) = 2.6 / 77.1 = 3.4%.

Contrast the contributions before overheads of 0.3% and 3.4% with the cost of funding which is 3.49% (AR2020 p46). Liquid milk processing appears to be a white elephant for now. Is the "low overhead recoveries" indicative of liquid milk sales in 2020 that were lower than expected based on the 4 months ended July 2019? SML urgently needs to implement synergy cost savings across all 3 business units.

Note Talbot contributed revenues of $11.5m (AR2020 p60) and Dairyworks $81.5m (AR2020, p61) annualised to $245.3m.

Restating revenues for Dairyworks to a full year of $245.3m gives annual revenues of $1,465.8m. Taking off Talbot $11.5m and Dairyworks $245.3m leaves revenues of $1,209m. Assuming liquid milk sales to FS SI are about $1.40 per litre (being $1.80 retail - GST - est. 10% margin) gives revenues of around ($1.40 x 28,485/1.03) = $39m, leaving A2 sales of $1,170m.

Conclusion
This gives me A2 being ~80% of forward sales (being $1,170/$1,465.8).

I also looked at inventories which appear to be blowing out but a lot of that will be the higher average cost of cheese plus the longer maturation periods, so these numbers will be moving upwards which puts pressure on working capital. It's not necessarily a bad thing, just a slightly different business model compared to previous years.

Edit: re-reading the CFO Review, it appears the GP of $3.5m is actually a loss given it is in brackets.

[Beagle]

Nice post Ferg. What impact if ATM progress their proposed purchase of Mataura Valley ?
New customer Synlait claim to have won't start being revenue accretive until some stage in FY23 apparently so that could leave quite a hole in FY22 and some part of FY23 ?
Given likely eps in the late teens for FY21 I can't see why anyone would pay anything like $5, would you ?

[Ferg]

Thanks but on reflection I wonder if I am way off........ATM has fiscal year end June, SML is July so not too different.

ATM COGS in 2020 is $762m, SML revenues $1,302m.
ATM COGS in 2019 is $587m, SML revenues $1,024m.

I believe ATM also buys from Fonterra so not all ATM COGS will be SML revenues and very little will have gone into inventory building at A2. I could be way off in my estimates of how much A2 accounts for SML revenues. It could be a lot lower than I suggested above. Maybe the baby brother SML is a lot more independent from ATM than I gave them credit for.

But back solving revenues for SML off NPAT guidance gives me forecast revenues of $1,012m for FY21. Backing out Dairyworks, Foodstuffs and Talbot gives me a decline YoY for other (A2) sales of around 37% - which is not far off the advice that A2 was down 35%. This implies all of the other sales are to A2 (which does not work versus the numbers above), or SML is also experiencing similar declines in revenues compared to A2 for independent sales into Asia. What makes it tricky are the margins on cheese may differ to other products (the average cost is higher, but so is the revenue per MT) - I am juggling half a dozen variables with this.

Mataura Valley - A2 said this was to boost capacity. In light of lower volumes at both A2 and SML, maybe that extra capacity is no longer needed in the next couple of years. How to back out out of the DD process until the dust settles? Also, why invest in a competitor when you have a 20% stake in SML (which BTW will see another "loss" of $80m for the investment revaluation in 2021 at todays price). All very interesting but there is not quite enough information to solve the level of business between ATM and SML - which I find surprising given they are almost related parties. Maybe both parties want less reliance on eachother such that it is an agreeable trial separation of convenience.

I don't currently hold (never have) and can't see the value of the acquisitions and capex being realised until they get over their growth indigestion. They will also find themselves moving from being production oriented to sales oriented and I suspect are wearing the cost of their inexperience in this area with Foodstuffs - but I would be happy to be proved wrong. Unless they can get on top of their recent acquisitions and any synergy savings, then FY21 and 22 will have a hole compared to FY20 whilst they await the new client and/or a return to previous volumes with ATM - admittedly SML have already stated NPAT for 2021 will be half that of 2020. The question is how long and how low. In conclusion I wouldn't buy at this price, not yet but I will be watching with interest now I have crunched some numbers.

[chrisw]

Thanks but on reflection I wonder if I am way off........ATM has fiscal year end June, SML is July so not too different.

ATM COGS in 2020 is $762m, SML revenues $1,302m.
ATM COGS in 2019 is $587m, SML revenues $1,024m.

I believe ATM also buys from Fonterra so not all ATM COGS will be SML revenues and very little will have gone into inventory building at A2. I could be way off in my estimates of how much A2 accounts for SML revenues. It could be a lot lower than I suggested above. Maybe the baby brother SML is a lot more independent from ATM than I gave them credit for.

...

Hello Ferg!

This is interesting stuff, but you are looking at the wrong line in the financials. The majority by volume (MT) that Synlait sells and earns revenue on is bulk powders not canned infant formula. Relevant to profit here is the gross margin line not the revenue line (which is mostly driven by milk price). Per a shareholders presentation a few years ago they make a lot less money on bulk powders - main reason for this is that the Farmgate Milk Price is set based on a theoretical efficient producer that makes commodity powders (an ideal Fonterra if you will). Simply put infant formula grade equipment has higher capital and operating costs than bulk powder grade equipment so Synlait doesn't really make a lot of money producing commodity powders. It does however provide utilisation on the plant which spreads depreciation and interest costs.

One other thought is that the primary cost for Synlait is raw milk and Synlait has limited discretion how much it pays for it. For the last several years, when you include premiums that a high percentage of the suppliers get (think Lead With Pride), Synlait has paid at or above Fonterra prices. At about 60M litres of milk if they choose to pay 5 cents less than current forecast and GDT prices remain the same then that adds about $3.0m to the bottom line.

As an aside, everyone here probably remembers that a2 was constantly out of stock in Australia a few years back, so this isn't the first time their ability to forecast this grey market trade has been shown to have some holes. What is concerning though is that Mums generally do not change brands once their babies are happy with a formula. They will then feed the same formula through to stage 3 or stage 4 over 2-3 years. So, there is a long tail of sales once a Mum is buying. Conversely lost sales at this stage could mean that there is a permanent loss in market share, so it might be harder for them to 'bounce back'. Time will tell.

Certainly it is clear that the diversification strategy is essential.

Cheers, Chris W.

[BlackPeter]

I'm trying to get my head around revenues and/or volumes from customers other than A2 for SML. Apologies in advance for the long post.

Summary, in my estimates:

A2 make up about 84% of total milk sales, excluding cheese
A2 projected to be around 80% of total $ sales after recent acquisitions
Recent cheese acquisitions gave a GP contribution before overheads of 3.4% of the cost of investment vs cost of external finance 3.49%
I estimate Liquid Milk production is running at about 25% utilisation => white elephant with return lower than the cost of external finance unless other customers can be found urgently
Increasing inventories are likely due to cheese which will put pressure on working capital, as total volumes and cost/MT are both increasing.



Background
Per the AR2019 p8 Chair Review: "Our current business can be fairly described as essentially focused around one sector, one market and one customer, that being infant formula for China via The a2 Milk Company." It take this to mean the VAST majority (99%+?) of sales are to A2.

SML invested $134m (AR2019, p6, 8 & 11) to expand the production facilities at Dunsandel to process liquid milk for their first customer, Foodstuffs South Island in early April 2019 (AR2019 p8, 11, 14). They also invested $37.8m acquiring Talbot Forest Cheese Ltd (AR2019 p55).

Per the AR2019 CFO Review p14: "This year we commissioned our advanced liquid dairy packaging facility at Dunsandel supplying Foodstuffs South Island. The plant was commissioned in early April, and in the four months following, the facility produced 8,840,469 litres. Gross profit from fresh milk was ($3.5 million) reflecting some initial commissioning challenges and low fixed overhead recoveries. In FY20 we expect to stabilise performance and bring it back in line with expectations."

Liquid Milk Volumes
Assuming the plant opened 6 April 2019, that gives a maximum 117 days of production. 8.84m litres produced equates to 75,560 litres produced per day. Extended over a year that gives an indication of Foodstuffs SI demand of 27.58m litres per annum. Per AR2020 p14 the production capacity is "110ML" which I assume to mean 110m litres per annum. Without any other customers, or change in demand from the sample period April-July 2019, this gives a utilisation rate of 25% (being 27.58/110). It's no surprise SML needs to find other liquid milk customers...!

The company reported total sales of 149,730MT in 2019 and 150,432MT in 2020 (AR2020 p24) with a note at the bottom stating "Synlait Milk Limited only and fresh milk is excluded in FY20 and FY19 (part year in FY19)". I am assuming MT is metric tonnes and it appears these are whole numbers, not thousands or millions.

1 litre of milk averages around 1.03kg plus or minus depending on the fat content. Assuming 116 of 117 days liquid milk production in 2019 was sold (assuming what is produced today is sold tomorrow), that equates to around (75,560 x 116 * 1.03/1000) 9,028MT of liquid milk sales. As a percentage of total tonnage sold this would imply (149,730/158,758) 94% of total milk volume sales in 2019 were to A2, excluding cheese.

Extending this to 2020, let's assume liquid milk sales of 75,560 x 366 x 1.03/1000 = 28,485MT. As a percentage of total milk sales (excluding cheese, and assuming the remainder is A2) this implies A2 is 84% of total milk volumes sold (being 150,432/178,917).

Cheese & Liquid Milk Impact
Dairyworks Ltd was also acquired 1 April 2020 at a cost of $112m (p60 AR2020) which further muddies the waters.

What is interesting to note is this comment from AR2020 p25: "The Everyday Dairy category represents the acquisition of Talbot Forest Cheese and Dairyworks, along with the Advanced Dairy Liquid Packaging Facility at Dunsandel. Gross Profit from this area is net $0.4 million, a result reflecting some initial commissioning challenges in the Advanced Dairy Liquid Packaging Facility at Dunsandel and low fixed overhead recoveries as we move from commissioning phase to a focus on increasing utilisation. Dairyworks and Talbot Forest Cheese are tracking to expectations generating Gross Profit of $2.6 million combined in FY20."

Is the $0.4m the total GP for just liquid milk from Dunsandel? Or is it the 3 business units combined which would imply a GP loss for liquid milk - surely not? Either way, that is a far cry from the $3.5m reported for the 4 months ended July 2019. A GP contribution of $0.4m on an investment of $134m is risible. It is likely the GP was slaughtered by increased depreciation and wage costs which form part of Cost of Sales (AR2020 p37) but what explains the rest of it - lower volumes?

Furthermore, if the GP for Talbot and Dairyworks combined is $2.6m on an investment of (118 + 37.8) $155.8m then that is a contribution before fixed costs of 1.7%. Admittedly Dairyworks is only 4 months so adjusting the investment (not the GP given it is not disclosed), gives a contribution before overheads of 2.6 / (118/3 + 37.8) = 2.6 / 77.1 = 3.4%.

Contrast the contributions before overheads of 0.3% and 3.4% with the cost of funding which is 3.49% (AR2020 p46). Liquid milk processing appears to be a white elephant for now. Is the "low overhead recoveries" indicative of liquid milk sales in 2020 that were lower than expected based on the 4 months ended July 2019? SML urgently needs to implement synergy cost savings across all 3 business units.

Note Talbot contributed revenues of $11.5m (AR2020 p60) and Dairyworks $81.5m (AR2020, p61) annualised to $245.3m.

Restating revenues for Dairyworks to a full year of $245.3m gives annual revenues of $1,465.8m. Taking off Talbot $11.5m and Dairyworks $245.3m leaves revenues of $1,209m. Assuming liquid milk sales to FS SI are about $1.40 per litre (being $1.80 retail - GST - est. 10% margin) gives revenues of around ($1.40 x 28,485/1.03) = $39m, leaving A2 sales of $1,170m.

Conclusion
This gives me A2 being ~80% of forward sales (being $1,170/$1,465.8).

I also looked at inventories which appear to be blowing out but a lot of that will be the higher average cost of cheese plus the longer maturation periods, so these numbers will be moving upwards which puts pressure on working capital. It's not necessarily a bad thing, just a slightly different business model compared to previous years.

Edit: re-reading the CFO Review, it appears the GP of $3.5m is actually a loss given it is in brackets.

Wow, you clearly put a lot of work into that and (while not having checked the numbers) I think that this could be the start for a valuable analysis.

Couple of questions, though:
- did you intentionally omit the Lactoferrin? In some years (not sure whether now) did this used to be a good source of additional income.
- what about their standard milk powder (neither A2 nor IF)? The various times I visited their premises they used to store plenty of 25kg packs of milk powder in their warehouse - and I suppose they are selling them as well :): Does this appear in you calculation as "liquid milk"? Might this be the reason for your perceived low utilization rate?
- not sure whether they sell a lot of grass fed milk ... but they do collect it (separate collection bays) and I have seen them sell it. Do you have any numbers how much of that they sell and where would it appear at the moment in your analysis?
I think it might be worthwhile to re-run your analysis with some more of their product groups included.

[Greekwatchdog]

Some good news for shareholders http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/365517/337994.pdf

[Nigel]

Not sure it's good (or bad) news, because we have already settled with the complainant for an undisclosed sum. In hindsight, we could have waited for this judgement. But I guess they wanted to remove the uncertainty and risk.

[BlackPeter]

Some good news for shareholders http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/365517/337994.pdf

Feels a bit like: This would have been your price ;) - doesn't it? I guess it sort of supports the legal stance Synlait used to follow (and better legal minds than me might comment on that - I find it a bit concerning), but it does not change the latest earnings downgrade by a bit ...

[Cash_Lion]

Nice post Ferg. What impact if ATM progress their proposed purchase of Mataura Valley ?
New customer Synlait claim to have won't start being revenue accretive until some stage in FY23 apparently so that could leave quite a hole in FY22 and some part of FY23 ?
Given likely eps in the late teens for FY21 I can't see why anyone would pay anything like $5, would you ?

A2 has contracted with Synlait until AT LEAST 2025

[dreamcatcher]

Never any doubt SML would lose Pokeno decision against plenty of scaremongering rubbish posted by some posters...........

Synlait welcomes Supreme Court judgment - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/365517)

[Beagle]

12160
"Brilliant" management have done "wonders" for Synlait's shareholders in the last couple of years.

Always comical when people say the decision was never in doubt "after the fact" as though they have inside knowledge of the thought processes of the most esteemed judges in the Supreme Court and are more skillful than the QC lawyers involved.

Synlait down 45% in the last 2 years and the market up ~ 50%. Put some numbers on that to throw some stark light on it. $100,000 invested in Synlait 2 years ago is now worth $55,000. $100,000 invested into an index tracker fund 2 years ago is now worth ~ $150,000, nearly three times as much !

That's what I call truly shocking under performance !! I am very happy indeed with my read on the extreme risks involved and the actions I took to mitigate those by selling as soon as I caught a decent whiff of corporate B.S. Hopefully the subsequent barking helped a few others avoid losing their shirts on this flea bitten mange infested mutt.

16.9 cps forecast for FY21...that's absolutely pathetic.

[dobby41]

Always comical when people say the decision was never in doubt "after the fact" as though they have inside knowledge of the thought processes of the most esteemed judges in the Supreme Court and are more skillful than the QC lawyers involved.


It has been comical seeing all the bush lawyers giving there predictions on the outcome.
Neither way was a sure thing (a win or a loss) but some people seemed to comment as if they KNEW.

[Beagle]

It has been comical seeing all the bush lawyers giving there predictions on the outcome.
Neither way was a sure thing (a win or a loss) but some people seemed to comment as if they KNEW.

LOL - I'm not known for being subtle I'll grant you that but this place would be "dead as a morgue" without good speculative and robust debate !! The main thing as far as I am concerned is that I was right regarding the shares and finding a vastly better home for one's money in recent years has not been difficult. If the loud barking saved a few other people losing their shirts then I'm as happy as a Beagle eating unlimited Christmas lunch :D

I suppose people who think that the planet and people and all the endless resources expended on LGTBQ inclusiveness are happy to see their investment roughly halved in the last two years ? People and planet are just as important right...I suppose two out of three isn't too bad ?

[BlackPeter]

It has been comical seeing all the bush lawyers giving there predictions on the outcome.
Neither way was a sure thing (a win or a loss) but some people seemed to comment as if they KNEW.

You want to point us to posts where people said they know the outcome - or are you just grandstanding? I remember only posts pointing out a material risk for Synlait to lose ... and hey, what a risk it was ...

Synlait management was gambling shareholder funds with very high stakes. District court saying heads and High court saying tails indicated already that the legal situation is deeply uncertain. It was only Synlait management who choose to rely on the coin in the Supreme Court to fall into the right place and they did bet several hundred million of shareholder funds on that.

The fact that they have been this time lucky in the Supreme Court does not prove that they acted in a careful manner - well, not more than a drink driver managing to avoid an accident would be evidence that drink driving is safe.

[Beagle]

Well said BlackPeter. To risk the last 6 years profits on an uncertain outcome is gross recklessness in the extreme and indicates some truly woeful governance shortcoming in the board at Synlait. All that was warned about was the extreme risks they were taking.

But wait there is more !!!! Further, there are ongoing governance concerns with vast amounts of management resources applied to elevating people and all things inclusiveness and the planet to exactly the same level as shareholders and all without getting approval from shareholders by way of a special resolution to embark upon this fundamental course change in the very reason for the company to exist !!

Perhaps Synlait see themselves as a one stop shop for investors who want to invest their money, gamble at the Casino on 50/50 outcomes (AKA play Russian Roulette with 3 bullets in the gun), and donate vast sums of money to Greenpeace all at the same time :confused:

16.9 cps is where the numbers are. If people are happy with how things have worked out, seen their shares decimated and are happy with the forecast, they're very easily pleased.

[dreamcatcher]

My positive thoughts from the past regarding Pokeno outcome and I continue to hold. Some may sell but portfolio has plenty of other stocks very profitable to compensate. Wow wish the beagle had put up his (in hindsight) $100,000 scenario a year ago when this started instead of the gloating towards holders with the help of banned minimoki who's posts were all deleted.

17-2-2020
Covenant law outdated and needs replacing.
Only part of building on covenanted land but have every right to build on any un-covenanted land. I'm not a lawyer but fail to see any damage done to Mr Ye. If total land had a covenant and SML built I would understand him been upset.
Bring on April

12-1-2020
Ground hog day till April when Pokeno site issues addressed finally (hopefully) and EXPECTING A FAVORABLE RESULT ...any new business announcements probably waiting on that result. Couple of new brands waiting on Chinese SAMR approval. If the ducks line up SP could bounce quickly as small number of retail sellers around.
Continue to hold and importantly in-profit without any further buy/sells but cannot say I'm overjoyed with management.

28-9-2019 HC
True they could have waited but clearly Mr Ye intentions or demands unknown but to date still no settlement forth coming, time is money, business needs to continue so let the courts decide outcome probably was the only way forward anyway. I doubt courts would order demolition of state-of-art factory that is commissioned and employs (I think) 65+ people with 100 odd supply farms livelihoods which adds to Pokeno's welfare.

Public uproar would be interesting if such an outcome was ordered and imo unlikely.

[Siyamalan]

Synlait is probably sliding towards $3-3.5

[ralph]

Just a tad concerning why would Roger Schwarzenbach (general manager ) sell all his shares 19,366 at this stage A couple of days ago

Synlait is probably sliding towards $3-3.5 I do not think anyone big is buying synlait

[Sideshow Bob]

Interesting to compare Synlait to a similar size company, albeit with more plants/different strategy. Synlait made $75.2m on turnover of $1.3b (slightly different YE July vs September).

Of course SML have now forecast something quite different for this year. Not sure if the forecast lift in dairy payouts will help OC further?

Below from Business Desk:

Open Country records another lift in profits (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=329b3d23b2&e=3b6f9185d3)Open Country Dairy has reported another healthy increase in profit saying it weathered the uncertainties of covid-19, but is still cautious about the future.
The company said revenue for the year ended Sept. 30 2020 was $1.6 billion, up from $1.4 billion the previous year. Net profit after tax was $67.6 million up from $31.4 million previously.

[ratkin]

Fairly steady downtrend now, maybe decent buying at some stage in the future, but certainly not yet

[Baa_Baa]

Fairly steady downtrend now, maybe decent buying at some stage in the future, but certainly not yet

Rotfl, that's an understatement! Now below the Covid low price and in decline since September 2018 highs $13.53 ! The only nice thing about this chart is the tribute to branding, diversity and sustainability (https://invst.ly/trszt).

Otherwise, it's an unmitigated disaster of capital destruction, with no plan to return to its former glory.

Weekly chart, by the way. That's a heck of a lot of weeks in down trend

[winner69]

Book value about $3.40

Not likely to be earning enough to cover its cost of capital (ie value destroying) for many years so no reason it should trade above book value ...unless one is full of optimism and convinced that SML will one day be great.

Said this when share price was $10 ...then again when it was $12 ..and again at $8 and again at $6 ......and one day I might say it’s about fair value when share price is about $3.40

[sb9]

Rotfl, that's an understatement! Now below the Covid low price and in decline since September 2018 highs $13.53 ! The only nice thing about this chart is the tribute to branding, diversity and sustainability (https://invst.ly/trszt).

Otherwise, it's an unmitigated disaster of capital destruction, with no plan to return to its former glory.

Weekly chart, by the way. That's a heck of a lot of weeks in down trend

Yeah it’s sad looking chart, sold two parcels in 10s and last two parcels around 8 and 7. Leon’s leadership completely destroyed shareholders value and returns. Sorry traits of ex Fonterra management style. Can’t believe Board still has confidence in him.

[Baa_Baa]

Book value about $3.40

Not likely to be earning enough to cover its cost of capital (ie value destroying) for many years so no reason it should trade above book value ...unless one is full of optimism and convinced that SML will one day be great.

Said this when share price was $10 ...then again when it was $12 ..and again at $8 and again at $6 ......and one day I might say it’s about fair value when share price is about $3.40

You have a special note on my chart now, $3.40 "book value", dated 10/2/21. Let's assume the SP gets down to your book value you say also (fair value), would that equate to a buy? Seems there's no end to this company digging debt holes that they can't fill anytime soon. Maybe a buy is more likely a significant SP discount to book value, assuming they're not going to bust. Even that might be drawing a long bow.

[Beagle]

Good post Baa Baa. The truth is very ugly. Forecast is for 16.9 cps. Put a no growth, (which it is now), PE of 11 on that and you get $1.86.
With the current management and board I wouldn't even be interested at that price.

[winner69]

You have a special note on my chart now, $3.40 "book value", dated 10/2/21. Let's assume the SP gets down to your book value you say also (fair value), would that equate to a buy? Seems there's no end to this company digging debt holes that they can't fill anytime soon. Maybe a buy is more likely a significant SP discount to book value, assuming they're not going to bust. Even that might be drawing a long bow.

Cool BaaBaa

You also need to add a note about Beagles possible 189 while you are at.

Was only a month or so punters were happy at buying in the 5’s and expecting it go to its former heights ...hmmm

[winner69]

Got back on this horse at $5.40 for another crack. Goldmans have upgraded to Buy with a $7.02 target price.

Hope you got off the horse Johnny ...before it broke a leg

[JohnnyTheHorse]

Hope you got off the horse Johnny ...before it broke a leg

Maybe even two legs! I sold that parcel in the $5.20's from memory, when a2 when into a halt.

[ralph]

Fairly steady downtrend now, maybe decent buying at some stage in the future, but certainly not yet
I agree at sp 4.3 its cheaper than fsf 4.6 ! and as they are joined at the hip to atm through the A2 milk trend/fad when they pick up so will synlait .
Ratkin this could be rock bottom for this Sp

[kiwi_crusader]

Whats the story with Synlait closing down their Talbot Forest cheese production factory at Temuka for 6 months? Apparently keeping staff on full pay while they bring the building up to production standards and sort out their waste product dumping problems. Bought a lemon, court case with periours owner under way.

[BlackPeter]

Whats the story with Synlait closing down their Talbot Forest cheese production factory at Temuka for 6 months? Apparently keeping staff on full pay while they bring the building up to production standards and sort out their waste product dumping problems. Bought a lemon, court case with periours owner under way.

Interesting ... do you have a source for this info you can share?

Talbot probably too small in the overall scheme to make this news material ...

[kiwi_crusader]

Interesting ... do you have a source for this info you can share?

Talbot probably too small in the overall scheme to make this news material ...

Yes, they told their transport company Friday last week that there will be no more cheese going to Christchurch cold storage for 6 months. Staff filled in the rest.

[Baa_Baa]

Yes, they told their transport company Friday last week that there will be no more cheese going to Christchurch cold storage for 6 months. Staff filled in the rest.

Sounds 'material' to me. The good news just keeps on coming with SML. :mad ;:

[kiwi_crusader]

Sounds 'material' to me. The good news just keeps on coming with SML. :mad ;:

Now Dairy Works have to buy their bulk cheese from Fontera or Open Country, less profit for them.

[BlackPeter]

Sounds 'material' to me. The good news just keeps on coming with SML. :mad ;:

It certainly would be material for Talbot cheese. It is just - from memory (I can't find them in the annual report - they are probably too small ;)) their revenue represents less than 1% of SML's revenue (and a still smaller proportion of their earnings), i.e. no need for SML to announce these things.

And yes, Thank you kiwi-crusader. Useful info.

[Baa_Baa]

It certainly would be material for Talbot cheese. It is just - from memory (I can't find them in the annual report - they are probably too small ;)) their revenue represents less than 1% of SML's revenue (and a still smaller proportion of their earnings), i.e. no need for SML to announce these things.

And yes, Thank you kiwi-crusader. Useful info.

True for Talbot, but seems just another thing SML keep to themselves and shareholders find out in the media or through other connections. Why wouldn't they let shareholders know they've shut the plant down for 6 months! (to give benefit of the doubt, maybe they are planning on an announcement to market soon?).

2/8/2019 - Synlait completes Talbot Forest Cheese Acquisition

[abridged] "“The acquisition enables us to manufacture a variety of cheese products. It also helps us optimise our manufacturing assets (especially during peak seasonal flows), access new profit pools, and align with our approach to run a high-quality, flexible dairy manufacturing plant that enables us to tailor product to meet customer needs.”

Mr Bull says Synlait plans to produce around 5,000 tonnes of cheese during the 2019/2020 season.

“Our highly automated plant is capable of manufacturing both dry and brine salted products, including parmesan, cheddar, gouda and mozzarella for both retail and foodservice customers. In addition, we have retained the ability to make open vat cheeses such as haloumi and feta, which are extremely popular.”


That was then. What about now?

[RTM]

That was then. What about now?

Agree. They have not communicated several important items to shareholders.
That was a LARGE part of the reason I exited at $10.
In particular from memory it was lack of communication around registration of product with China.

[winner69]

Book value about $3.40

Not likely to be earning enough to cover its cost of capital (ie value destroying) for many years so no reason it should trade above book value ...unless one is full of optimism and convinced that SML will one day be great.

Said this when share price was $10 ...then again when it was $12 ..and again at $8 and again at $6 ......and one day I might say it’s about fair value when share price is about $3.40

Think I’ll reduce that target to 300 or lower

[Baa_Baa]

Think I’ll reduce that target to 300 or lower

You said on 10/2 book value $3.40. There's no technical support there, next below is $3.7 then .. gulp $2.90. This is one seriously screwed share price with no upside in sight and no shining light on the horizon to give any sense of hope it might all come right. Hard to believe is was over $13.50 late 2018 and a disaster since.

[Beagle]

Good post Baa Baa. The truth is very ugly. Forecast is for 16.9 cps. Put a no growth, (which it is now), PE of 11 on that and you get $1.86.
With the current management and board I wouldn't even be interested at that price.

I'm sticking with $1.86. No reason to believe earnings will grow any year soon, in fact with ATM's very high current stock level and its outlook its possible Synlait may not make their forecast for FY21. Synlait an excellent example of what happens when all rationale about putting shareholders and earnings as the number one priority are thrown out the window and ESG considerations are elevated FAR beyond sensible level's. I wouldn't trust this lot to run a chook raffle.

[winner69]

You said on 10/2 book value $3.40. There's no technical support there, next below is $3.7 then .. gulp $2.90. This is one seriously screwed share price with no upside in sight and no shining light on the horizon to give any sense of hope it might all come right. Hard to believe is was over $13.50 late 2018 and a disaster since.

The elevated prices wasn’t Synlait’s making ....just punters / ‘investors’ seeing something that was never there and priced it accordingly. Many of these ‘investors’ were just momentum traders who got on the band wagon and proclaimed what a great company Synlait was.

Synlait was and still is essentially a capital intensive commodity producer ....nothing real special that would command a irrational / exuberant share price

Synlait as a company is a pretty solid one - has a long term strategy and is allowing that strategy to play out. Much to be admired about how they are positioning themselves for the future.

Sadly, as is the case of many companies, Synlait the company is judged by its share price - which unfortunately they have no control over or the irrationality or exuberance of the punters / investors’ that set the share price.

[BlackPeter]

You said on 10/2 book value $3.40. There's no technical support there, next below is $3.7 then .. gulp $2.90. This is one seriously screwed share price with no upside in sight and no shining light on the horizon to give any sense of hope it might all come right. Hard to believe is was over $13.50 late 2018 and a disaster since.

Well, Leon did an amazing job, didn't he? One can clearly see that he learned his trade at Fonterror:

12343

Leon started at Synlait in August 2018 (this was basically the all time high of the share price).

https://www.synlait.com/news/leon-clement-announced-as-synlait-milks-new-ceo/

that's how Leon appraised his new company in 2018:

“The business is in fantastic shape and we will continue to target sustainable growth by leveraging the potential within our organisation, as well as the potential in the markets and customers we partner with,” adds Mr Clement.

Oh Leon, what happened with the $1.8b of shareholder value destroyed since you made this statement? This is two thirds of the companies value ...

Time to go - or are you not yet finished with your job?

[BlackPeter]

The elevated prices wasn’t Synlait’s making ....just punters / ‘investors’ seeing something that was never there and priced it accordingly. Many of these ‘investors’ were just momentum traders who got on the band wagon and proclaimed what a great company Synlait was.

Synlait was and still is essentially a capital intensive commodity producer ....nothing real special that would command a irrational / exuberant share price

Synlait as a company is a pretty solid one - has a long term strategy and is allowing that strategy to play out. Much to be admired about how they are positioning themselves for the future.

Sadly, as is the case of many companies, Synlait the company is judged by its share price - which unfortunately they have no control over or the irrationality or exuberance of the punters / investors’ that set the share price.

Yes - and no. Pokeno trouble has been home made - had nothing to do with market exuberance. Huge dependency on ATM was clearly home made as well - they choose to put nearly all their margin eggs into one basket. Their management choose to go the fast and risky (little diversification) path, and failed.

However - market hyped them up as A2 milk proxy - and as long as ATM was driven by hype, SML was as well. Well, it looks like this problem solved itself :):

And yes, you are right - it is a solid company and they no doubt will survive and hang around for a long time. Question is just - how much will they be worth? I remember them 5 years ago around $3 per share, and this still might be a fair price. Progress?

[Beagle]

The elevated prices wasn’t Synlait’s making ....just punters / ‘investors’ seeing something that was never there and priced it accordingly. Many of these ‘investors’ were just momentum traders who got on the band wagon and proclaimed what a great company Synlait was.

Synlait was and still is essentially a capital intensive commodity producer ....nothing real special that would command a irrational / exuberant share price

Synlait as a company is a pretty solid one - has a long term strategy and is allowing that strategy to play out. Much to be admired about how they are positioning themselves for the future.

Sadly, as is the case of many companies, Synlait the company is judged by its share price - which unfortunately they have no control over or the irrationality or exuberance of the punters / investors’ that set the share price.

I have expressed a wide range of concerns regarding very poor governance, extreme risk taking with Pokeno, extremely poor and very "economical" shareholder communication about pertinent factors, debt level's, share price reacting before announcements, (leaky ship), very slow and lack of progress with other brand accreditation, poor financial performance and last but certainly not least expending vast amounts of management time and resources getting accreditation to elevating people and the planet to the same level as shareholders all without obtaining a special resolution for their radical ESG approach.

With all due respect I think you have the cart before the horse. The share price is the market reacting to the above, not the other way around.
Now it appears we may be able to add very poor due diligence of operational systems regarding the cheese factory acquisition to the list. Why would this surprise anyone with a company so single mindedly laser focused on all things ESG ?

I put it to you and others that Leon is an extremely poor CEO and has lost any mandate he had to manage this company. He needs to go.

[winner69]

SML shareprice sinking closer to book value of 340 and based on current financial performance (returns unlikely to cover its cost of capital) it should go lower

So even at 386 market expecting good earnings growth in future

Guru analysts seem hopeful for better times with targets ranging from 460 to 587

[ratkin]

SML shareprice sinking closer to book value of 340 and based on current financial performance (returns unlikely to cover its cost of capital) it should go lower

So even at 386 market expecting good earnings growth in future

Guru analysts seem hopeful for better times with targets ranging from 460 to 587

They should have stayed in Dunsandel, rapidly heading back towards their listing price

[BlackPeter]

SML shareprice sinking closer to book value of 340 and based on current financial performance (returns unlikely to cover its cost of capital) it should go lower

So even at 386 market expecting good earnings growth in future

Guru analysts seem hopeful for better times with targets ranging from 460 to 587

OK - lets test the value of the guru analyst forecasts, shall we?

In February 2020 SML share price peaked at $8.51; I know, difficult to imagine such heights these days.
At that stage the same guru analysts predicted that the share price will go down to $7.57 (consensus prediction) though for some funny reason they still recommended a strong hold (5.76 out of 10); Peak Share price in February 2021 was $5.43. Sigh - I know, so high ...

Anyway, good people the guru analysts, they knew that SML was overvalued and predicted a drop. Missed however somehow the order of magnitude of the drop, didn't they?

Not quite sure I would use their recommendations these days other than for entertainment purposes ... btw - I see they moved their buy recommendation upwards (now 6.88 out of 10).

On the other hand - assuming SML does not bite the dust (I don't), they need to go up again at some stage. Question is just - where is the bottom? TA might be a more useful tool to determine that ...

[sb9]

Holy smoke, Leon can't get anything right going. He's reaching new bottom with each announcement :eek2:..

[bull....]

big downgrade today

The ongoing uncertainty of The a2 Milk Company’s expected demand for the remainder of FY21 and FY22

Given the significant volatility and uncertainty that is affecting Synlait at this time due to the above factors, the company’s Board and Management see a broad range of outcomes still possible in FY21. However, the company’s previous guidance, that the overall FY21 NPAT result will be approximately half that of the FY20 NPAT result, will now not be attainable.

https://www.nzx.com/announcements/368584

[Baa_Baa]

SML shareprice sinking closer to book value of 340 and based on current financial performance (returns unlikely to cover its cost of capital) it should go lower

So even at 386 market expecting good earnings growth in future

Guru analysts seem hopeful for better times with targets ranging from 460 to 587

Ouch, looks like your BV will be in play very soon. :scared:

[winner69]

So half of last years’s profit too optimistic

I’d say he was too embarrassed to say the word LOSS

That’s covered by a ‘broad range of outcomes still possible’ isn’t it?

[Baa_Baa]

On the other hand - assuming SML does not bite the dust (I don't), they need to go up again at some stage. Question is just - where is the bottom? TA might be a more useful tool to determine that ...

TA not that helpful, a fairly wide support band between $3.75 and $2.95 from 2017 .. crikey, we're talking 4 years of lost SP capital. Big downgrades don't respect TA supports. Might see a capitulation event on this one.

[ratkin]

What an ugly announcement, at least when/if it eventually turns the tree will have been well and truly shaken. Anyone still holding obviously thick skinned, but this will test their resolve to the limit.

[Sideshow Bob]

The day after GDT prices jumped 15%.......

[winner69]

TA not that helpful, a fairly wide support band between $3.75 and $2.95 from 2017 .. crikey, we're talking 4 years of lost SP capital. Big downgrades don't respect TA supports. Might see a capitulation event on this one.

Will go below BV (which after a loss this year is possibly less than 340)

Maybe the 295 you mention might hold this time around ..or 300 as a nice round number

[Balance]

Why buy the cow when you can buy the milk - quote that comes to mind with a capital-intensive manufacturer like SML vs a capital-light high margin brand driven consumer ATM?

[sb9]

When sp goes below $3 eventually which is almost certain now, wonder if anyone (incl Instos) are on right side of ledger?

Penno must be ruing that he should have sold bunch more at the peak of around $11 or so from memory.

[Getty]

Today,
Fonterra looking at paying up,

Synlait looking at laying down,

Has A2 met its Waterloo?

[winner69]

Why buy the cow when you can buy the milk - quote that comes to mind with a capital-intensive manufacturer like SML vs a capital-light high margin brand driven consumer ATM?

That’s why it’s a worry that A2 seem hell bent on buying more cows (or big parts of cows)

[Getty]

Some say NZ is at Peak Cow.

Now, its the shareholders being led into a trough...

[Sideshow Bob]

Some say NZ is at Peak Cow.

Now, its the shareholders being led into a trough...

Maybe becoming clearer why A2 bought into MVM.....??

[Getty]

Few, if anyone, will want to read this, but around the world, farming is a peasant class economy.

Perhaps its going the same way in NZ,

Wool, now...

[winner69]

this part of announcement The resulting impact of the above on Synlait’s manufacturing recoveries, which sees infant formula base powder production dropping significantly as outputs and inventory levels reset to a new outlook. ......

means ....

we will have lots of staff hanging around doing nothing until things pick up.

[dobby41]

I gather ATM doesn't have minimum quantities that they have to take.
What happens to all the milk not required?

[Gerald]

The day after GDT prices jumped 15%.......


Not necessarily great for the company as it squeezes margins on retail products (and maybe IF depending on the A2 deal).

"
Because of course, as we know, global dairy prices tanked in 2015 and then went even lower in 2016.
Now I said earlier that good news for some can be bad for others. Well, it works in reverse too, you see.
The reality is, I think those plunging global dairy prices stopped Fonterra from getting into the financial cactus, well, pretty much as early as 2015.
Yes, that's right, the tanking milk price, bad as it was for farmers, was a saviour for a horrifically overspent and overborrowed Fonterra.



Consider this: In 2014 Fonterra's cost of goods sold was $19.813 billion, reflecting the high cost of its milk. In 2015 that figure dropped to $15.567 billion and in 2016 it dropped again, to $13.567 billion.
So, that's right, Fonterra's cost of goods across that two year period dropped by 31.5%, by a whopping $6.246 billion. "

https://www.interest.co.nz/opinion/101631/david-hargreaves-continues-crunching-numbers-fonterra-and-points-2015-year-it-all?fbclid=IwAR1k3qs02wnJEINJ5MtRXj5Eazk_TmCIgoGYL N4T1nhzY4BDfPVFob0WCEw

[winner69]

Few, if anyone, will want to read this, but around the world, farming is a peasant class economy.

Perhaps its going the same way in NZ,

Wool, now...

I've read this book a few times - quite intriguing

Back on the Road to Serfdom: by Thomas E. Wood

[Balance]

Not necessarily great for the company as it squeezes margins on retail products (and maybe IF depending on the A2 deal).



Exactly - Economics 101 - rising input prices will squeeze manufacturers unless a manufacturer has pricing power and can pass on the input price increases.

[Habits]

Not necessarily great for the company as it squeezes margins on retail products (and maybe IF depending on the A2 deal).

"
Because of course, as we know, global dairy prices tanked in 2015 and then went even lower in 2016.
Now I said earlier that good news for some can be bad for others. Well, it works in reverse too, you see.
The reality is, I think those plunging global dairy prices stopped Fonterra from getting into the financial cactus, well, pretty much as early as 2015.
Yes, that's right, the tanking milk price, bad as it was for farmers, was a saviour for a horrifically overspent and overborrowed Fonterra.



Consider this: In 2014 Fonterra's cost of goods sold was $19.813 billion, reflecting the high cost of its milk. In 2015 that figure dropped to $15.567 billion and in 2016 it dropped again, to $13.567 billion.
So, that's right, Fonterra's cost of goods across that two year period dropped by 31.5%, by a whopping $6.246 billion. "

https://www.interest.co.nz/opinion/101631/david-hargreaves-continues-crunching-numbers-fonterra-and-points-2015-year-it-all?fbclid=IwAR1k3qs02wnJEINJ5MtRXj5Eazk_TmCIgoGYL N4T1nhzY4BDfPVFob0WCEw

The interest article by David H ... very interesting indeed

[Beagle]

I'm sticking with $1.86. No reason to believe earnings will grow any year soon, in fact with ATM's very high current stock level and its outlook its possible Synlait may not make their forecast for FY21. Synlait an excellent example of what happens when all rationale about putting shareholders and earnings as the number one priority are thrown out the window and ESG considerations are elevated FAR beyond sensible level's. I wouldn't trust this lot to run a chook raffle.25/02/2021

I've been on record for a long time now, (above is just one of many posts calling this company, its management and directors out as useless), that this company is on a road to nowhere and shareholders are on a hiding to nothing. Long term I see ATM taking their processing needs to their own facilities leaving this dog to stumble along riddled with issues not the least of which are grossly incompetent management and extremely poor governance. Penno should be ashamed of himself, what a disgrace the whole Pokeno fiasco was. I wouldn't be an investor at any price, not even $1.86.

[winner69]

Exactly - Economics 101 - rising input prices will squeeze manufacturers unless a manufacturer has pricing power and can pass on the input price increases.

.....compounded by the costs of an expensive to run and under utilised manufacturing plants

[Habits]

I've been on record for a long time now, (above is just one of many posts calling this company, its management and directors out as useless), that this company is on a road to nowhere and shareholders are on a hiding to nothing. Long term I see ATM taking their processing needs to their own facilities leaving this dog to stumble along riddled with issues not the least of which are grossly incompetent management and extremely poor governance. Penno should be ashamed of himself, what a disgrace the whole Pokeno fiasco was. I wouldn't be an investor at any price, not even $1.86.
Long road to tiperary there beagle... only another $2 to drop and if in the remotest chance it does then you would be justified in thinking "where's the bottom?"

[Rawz]

I've been on record for a long time now, (above is just one of many posts calling this company, its management and directors out as useless), that this company is on a road to nowhere and shareholders are on a hiding to nothing. Long term I see ATM taking their processing needs to their own facilities leaving this dog to stumble along riddled with issues not the least of which are grossly incompetent management and extremely poor governance. Penno should be ashamed of himself, what a disgrace the whole Pokeno fiasco was. I wouldn't be an investor at any price, not even $1.86.

Yes and I for one took notice of your barking and also Winner's warnings. Saved me a bunch as it was on my watchlist for a long time. Love this website

Thanks!

[Balance]

.....compounded by the costs of an expensive to run and under utilised manufacturing plants

The sad thing is that NZ desperately needs our primary produce to be further processed to add value.

[Getty]

Hey Beagle,

At this rate you will be running out of places to divide your fortune into 7 or 8, especially on NZ's earth.

Genesis Shipley will hold you high in her Rankines.

[Beagle]

this part of announcement The resulting impact of the above on Synlait’s manufacturing recoveries, which sees infant formula base powder production dropping significantly as outputs and inventory levels reset to a new outlook. ......

means ....

we will have lots of staff hanging around doing nothing until things pick up.

No worries, Leon will find heaps of worthwhile things to do, (remember people and planet are just as important as profit). What could possibly go wrong with such a rich ESG culture ;)
For a start they could totally reinvigorate their cultural awareness programs, could hold a week long seminar on cultural awareness for every single different nationality they have working for them, that would keep them busy for a while. Then they could bring in Te Reo experts and spend a few months getting all staff to speak Te Reo all the time....but that's not all, after that they could have months of tree planting programs, clean-up programs for the riverside all along the Waikato river. Plenty of "worthwhile" projects to keep them busy well into FY24 when they might eventually get accreditation for their own brand of milk.

Yeah I hear you Getty...finding quality companies that are well managed and governed, have decent prospects and are on sensible metrics on the NZX is not getting any easier ! Might have to expand my repertoire and get into shorting stocks, plenty of flea and mange ridden mutts on the NZX that's for sure and this one is a prime example !

[mike2020]

Hey Beagle,

At this rate you will be running out of places to divide your fortune into 7 or 8, especially on NZ's earth.

Genesis Shipley will hold you high in her Rankines.

When it's a buy you will hear about it. Like Fonterra it can adapt. ATM however I have less faith in, no longer any great moat and no real supply chain. If you look at yesterdays GDT result its largely ingredients and more or less tail end of the season demand based on Fonterra supply chain security. Don't expect a great divvy out of Fonterra either.

[Getty]

Beagle,

I thought your more timely retort may have been;

Store not your treasures on Earth.

"Lay not up for yourselves treasures upon earth, where moth, and rust doth corrupt, and where thieves break through and steal"'

The last bit particularly applicable to Qex and Moa, now SVR.

[Beagle]

Beagle,

I thought your more timely retort may have been;

Store not your treasures on Earth.

"Lay not up for yourselves treasures upon earth, where moth, and rust doth corrupt, and where thieves break through and steal"'

The last bit particularly applicable to Qex and Moa, now SVR.

LOL... Fill ya boots mate https://www.openbible.info/topics/money

Nice pun on the Genesis of all this ;)...your quotes "rank" right up there with the best and "generate" (okay I am out of puns now) a lot of debate in theological circles about the conundrum of financial planning and its relevance for Christians. Fortunately King Solomon covered a lot of ground for us in Proverbs and Ecclesiastes.

[Getty]

That site is an eye opener, it will give old Confucius a run for his money.

[Balance]

That site is an eye opener, it will give old Confucius a run for his money.

"Man who fishes in other man's pond catches crabs"?

[Beagle]

Long road to tiperary there beagle... only another $2 to drop and if in the remotest chance it does then you would be justified in thinking "where's the bottom?"

12361 Maybe not that long a road. Simply extrapolating that chart out sees them down to below $1.68 later this year :eek2:

[Getty]

Getty say;

Big Frog in small pond, must be full of Bull.

[Beagle]

That site is an eye opener, it will give old Confucius a run for his money.

Sure would but there's some profound stuff there too https://everydaypower.com/confucius-quotes/

Probably should add one of my own. Dog who chases tail goes nowhere ;)...something people who recently stumped up for the cash issue for Synlait might like to reflect upon...

[Getty]

Dog who chases tail have acne, too much SeBum...

[BlackPeter]

this part of announcement The resulting impact of the above on Synlait’s manufacturing recoveries, which sees infant formula base powder production dropping significantly as outputs and inventory levels reset to a new outlook. ......

means ....

we will have lots of staff hanging around doing nothing until things pick up.

I recon cows won't stop to produce milk and somebody will need to turn this milk into something more durable like milk powder, unless they are just spilling milk (maybe we need to give ECAN a heads up?).

More likely they just need a larger storage hall or they might need to reduce their margins to keep selling the stuff?

[BlackPeter]

12361 Maybe not that long a road. Simply extrapolating that chart out sees them down to below $1.68 later this year :eek2:

The former Paper Tiger would tell you to use logarithmic axes. Now we know why :p;

[Nor]

No worries, Leon will find heaps of worthwhile things to do, (remember people and planet are just as important as profit). What could possibly go wrong with such a rich ESG culture ;)
For a start they could totally reinvigorate their cultural awareness programs, could hold a week long seminar on cultural awareness for every single different nationality they have working for them, that would keep them busy for a while. Then they could bring in Te Reo experts and spend a few months getting all staff to speak Te Reo all the time....but that's not all, after that they could have months of tree planting programs, clean-up programs for the riverside all along the Waikato river. Plenty of "worthwhile" projects to keep them busy well into FY24 when they might eventually get accreditation for their own brand of milk.

Yeah I hear you Getty...finding quality companies that are well managed and governed, have decent prospects and are on sensible metrics on the NZX is not getting any easier ! Might have to expand my repertoire and get into shorting stocks, plenty of flea and mange ridden mutts on the NZX that's for sure and this one is a prime example !

Painting is a good way to occupy staff. Pink is a good colour.

[Getty]

I recon cows won't stop to produce milk and somebody will need to turn this milk into something more durable like milk powder, unless they are just spilling milk (maybe we need to give ECAN a heads up?).

More likely they just need a larger storage hall or they might need to reduce their margins to keep selling the stuff?

LARGER storage hall?

Oh no, shades of the NZ Wool Board, Meat board, and to a lesser extent, Comvita, all over again.

The cost of storage, and carry cost, your customers know you have it, and need to get rid of it, one year turns into 2, then 3, use by dates loom, discounts prevail...

Much better to cash it up as you go, or cut production.

If your supplier agreements dont allow this, then you are not a cash cow...

[Sideshow Bob]

Bottomed out (for now) at $3.35, and climbing back to $3.60.

Only 23 days to wait until their result......

[Marilyn Munroe]

You may recall Agriculture Minister Damien O'Connor making comments about relations with the Chinese Communist Party which were criticized for kow towing and as unwelcome criticism of the way the underarm bowler government were dealing with them.

Damien as guardian of the agriculture sector was being astute in his comments. He knew the history of bad management in the agricultural processing sector was likely to reoccur. He was mindful we relied on Chinese Communist Party controlled entities to rescue Silver Fern Farms and Westland Dairy and wanted to keep them sweet.

Boop boop de do
Marilyn

[Getty]

Good bloke that Damien.

There is no way the gaggle of painters will be painting the SML sheds pink, under his watch.

[bull....]

You may recall Agriculture Minister Damien O'Connor making comments about relations with the Chinese Communist Party which were criticized for kow towing and as unwelcome criticism of the way the underarm bowler government were dealing with them.

Damien as guardian of the agriculture sector was being astute in his comments. He knew the history of bad management in the agricultural processing sector was likely to reoccur. He was mindful we relied on Chinese Communist Party controlled entities to rescue Silver Fern Farms and Westland Dairy and wanted to keep them sweet.

Boop boop de do
Marilyn

its part of the stealth takeover of NZ agriculture , sml may well be rescued by china one day when a2 masters take there contract to there facility

[BlackPeter]

The former Paper Tiger would tell you to use logarithmic axes. Now we know why :p;

Actually, I withdraw and apologize :): Must have been bored and drew up the logarithmic price chart for SML to take my medicine. Whatever it is supposed to convey - it clearly looks more terrifying than the linear chart :eek2:

12362

[winner69]

Senior management a mix of old timers and several who have joined the Team in last year or so.

CEO — whatever way you look at it it would appear what he’s been in charge off have not been a roaring success. I have a theory that some leaders (CEOs) are not lucky or have good fortune favour them in their careers even though they may be fantastic managers and as such the companies they lead generally tend to disappoint. (Works the other way as well as some CEOs always seem lucky)

How ‘lucky’ the newish headhunted CEO is will determine Synlaits fortunes.


I posted this in March 2019 when share price was still over $10 and when some were trying to convince me Synlait was a great investment (at that price).

Time as shown that Leon has continued to be one of the 'unlucky' leaders - born under the wrong star sign.

Often my posts are just notes to myself as to why I need to avoid being tempted into so called good investments.... and then share them on ST

[winner69]

Actually, I withdraw and apologize :): Must have been bored and drew up the logarithmic price chart for SML to take my medicine. Whatever it is supposed to convey - it clearly looks more terrifying than the linear chart :eek2:

12362

log scale highlights the rate of change mate - SML share price falling faster and faster as time goes by

But you already knew that

[JohnnyTheHorse]

If it holds these levels until the NZX50 June rebalance then will likely be kicked out I'm picking. THL also hanging on by a thread.

[winner69]

That $5.10 cap raise price in November was seen as a real bargain - it was at a 14% discount to last trading price $5.93 day before thevannouncement

[bull....]

I posted this in March 2019 when share price was still over $10 and when some were trying to convince me Synlait was a great investment (at that price).

Time as shown that Leon has continued to be one of the 'unlucky' leaders - born under the wrong star sign.

Often my posts are just notes to myself as to why I need to avoid being tempted into so called good investments.... and then share them on ST

well ahead of the herd you were winner

[Getty]

Without GRASSping at STRAWs, while chewing my cud, I notice a P/EE of 8.25 @ $3.39, maybe much of the fat is skimmed off, for a STOCK that has been recapitalised already.

Then I look at the greener grass over the fence, my cousin ATM, p/e 23.16 @ $10.05.

Then with a faraway look, I gaze at another exporter, FPH, p/e 41.21 @ $28.08.

Yes, I know winter is coming, and I'm yet to get through the bottom of the dip, but maybe this paddock isnt so bad after all.

[Gerald]

Without GRASSping at STRAWs, while chewing my cud, I notice a P/EE of 8.25 @ $3.39, maybe much of the fat is skimmed off, for a STOCK that has been recapitalised already.

Then I look at the greener grass over the fence, my cousin ATM, p/e 23.16 @ $10.05.

Then with a faraway look, I gaze at another exporter, FPH, p/e 41.21 @ $28.08.

Yes, I know winter is coming, and I'm yet to get through the bottom of the dip, but maybe this paddock isnt so bad after all.

December guidance was 37.5m which would be a PE of 22, new guidance is unknown but lets say 20m = PE 42.4

[Sideshow Bob]

Without GRASSping at STRAWs, while chewing my cud, I notice a P/EE of 8.25 @ $3.39, maybe much of the fat is skimmed off, for a STOCK that has been recapitalised already.

Then I look at the greener grass over the fence, my cousin ATM, p/e 23.16 @ $10.05.

Then with a faraway look, I gaze at another exporter, FPH, p/e 41.21 @ $28.08.

Yes, I know winter is coming, and I'm yet to get through the bottom of the dip, but maybe this paddock isnt so bad after all.

But that is when from last year when SML made $75m NPAT.

Then they announced in December that because of A2 their NPAT was going to halve.

Now they've withdrawn guidance. Just 23 days to wait to accurately get the PE.

As an aside, one of the dangers of PE as is an historic number. Some in Sharsies heavily rely (solely) on this.

[Rawz]

Without GRASSping at STRAWs, while chewing my cud, I notice a P/EE of 8.25 @ $3.39, maybe much of the fat is skimmed off, for a STOCK that has been recapitalised already.

Then I look at the greener grass over the fence, my cousin ATM, p/e 23.16 @ $10.05.

Then with a faraway look, I gaze at another exporter, FPH, p/e 41.21 @ $28.08.

Yes, I know winter is coming, and I'm yet to get through the bottom of the dip, but maybe this paddock isnt so bad after all.

All based on historical's of course.

SML about to double, ATM go to 30 and FPH down to 30.

[winner69]

What’s SML PE if they report a LOSS

[Beagle]

But that is when from last year when SML made $75m NPAT.

Then they announced in December that because of A2 their NPAT was going to halve.

Now they've withdrawn guidance. Just 23 days to wait to accurately get the PE.

As an aside, one of the dangers of PE as is an historic number. Some in Sharsies heavily rely (solely) on this.

Don't forget to factor in the extra shares on issue too with the recent cash issue. Maybe they do 8-10 cps this year ? Put a no growth PE of 11 on that and you get $1.00 :eek2:

Even more worrying is that most of this years profit will have been made in the first half and the near term prospects for FY22 look very bleak. Maybe FY22 eps is even lower than FY21 ?

[Beagle]

What’s SML PE if they report a LOSS

BINGO. That's a very good question for FY22 ;) (might just have enough earnings in the first half to sneak through with a very small profit this year).

Another cash issue next year ?

[winner69]

Seems a bit odd that they made no mention of a half year to January result .....even though they would essentially know what it is by now.

Methinks that’s pretty ominous

Last year H1 NPAT was $25m

[Getty]

Excellent contributions chaps.

Glad I'm not a holder, sold profitably at $7.70

Todays trading has risen from a low of $3.35 to $3.51, so some are in for a rude shock.

Most sobering of all is winner69, maybe loss, followed by writedowns?

Will be right down!

[Beagle]

Actually on reflection, I think you might be right about a loss overall this year. Second half outlook looks extremely grim and its quite likely they'll end up underwater for the year.

Wonder what shareholders will think when they're asked to reach into their pockets for yet another cash issue in 2022 ? Maybe they're praying for a takeover from ATM...but things don;t look all that bright there either with latest date of January sales down 70% year on year. Oh dear...

[Beagle]

I posted this in March 2019 when share price was still over $10 and when some were trying to convince me Synlait was a great investment (at that price).

Time as shown that Leon has continued to be one of the 'unlucky' leaders - born under the wrong star sign.

Often my posts are just notes to myself as to why I need to avoid being tempted into so called good investments.... and then share them on ST

Thanks for helping me clean the thin layer of milky residue off my glasses at ~ $10 so I could see properly.

[winner69]

Actually on reflection, I think you might be right about a loss overall this year. Second half outlook looks extremely grim and its quite likely they'll end up underwater for the year.

This from when they raised zillions -


• Synlait still expects volumes to increase in the second half of FY21 once stocks have cleared, however we are expecting our HY21 NPAT result to be significantly lower than HY20.


That was the optimistic story that H1 will be bad but we’ll be OK for the FY (like only slightly down on pcp)

That slightly down soon became about half of last year

And now they’ve stopped guessing


But the narrative is pretty dire and what they hint at for H221 is more than awful

So reading between the lines one has to assume the previous optimistic view that H1 will be significantly lower than $25m will now be really really bad after 2 downgrades ....and Leon will need to utter the words LOSS for H1

And H2 sounds like it’s going to be terrible as well - back out the hope from today’s update. — and probably another half year loss ....and unfortunately 2 negatives don’t make a positive in this game.

Astounds me that the share price has held up to the extent it has today ....future must be bright

[winner69]

Suppose those who fronted up with $5.10 in the November sale can’t ask for their money back because of false advertising

[Sideshow Bob]

Excellent contributions chaps.

Glad I'm not a holder, sold profitably at $7.70

Todays trading has risen from a low of $3.35 to $3.51, so some are in for a rude shock.

Most sobering of all is winner69, maybe loss, followed by writedowns?

Will be right down!

Some trades just keep looking better and better in hindsight! :cool:

[Gregnz]

Paying $5.10 a share a short time back for a company heavily in debt and so reliant on ATM, in one way makes ATM look like even better value. Less capital intensive and close to $800m in the bank, plus seemingly better management. Also appears that SML bear the brunt of increasing dairy costs and surplus dairy supply.
Perhaps A2's management aren't all that bad after all, they appear to have been quite diligent in constructing a supply agreement with Synlait which appears to be heavily weighted in A2's favour.

(disclosure: Im not a holder of SML).

[Beagle]

This from when they raised zillions -


• Synlait still expects volumes to increase in the second half of FY21 once stocks have cleared, however we are expecting our HY21 NPAT result to be significantly lower than HY20.


That was the optimistic story that H1 will be bad but we’ll be OK for the FY (like only slightly down on pcp)

That slightly down soon became about half of last year

And now they’ve stopped guessing


But the narrative is pretty dire and what they hint at for H221 is more than awful

So reading between the lines one has to assume the previous optimistic view that H1 will be significantly lower than $25m will now be really really bad after 2 downgrades ....and Leon will need to utter the words LOSS for H1

And H2 sounds like it’s going to be terrible as well - back out the hope from today’s update. — and probably another half year loss ....and unfortunately 2 negatives don’t make a positive in this game.

Astounds me that the share price has held up to the extent it has today ....future must be bright

Not looking good is it mate. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/362927/334702.pdf See last page...maybe if they painted the exterior of their processing factories all in pink that might help ;)

Anyway....I decided I needed to declutter my main watchlist today. No room for more anyway so took AIR, ATM, THL and SML off to a new separate watchlist called Trainwrecks.

[GTM 3442]

Given that there are two parties to every trade, who is buying?

Will there be some interesting ssh notices bubbling up in a few weeks?

[Sideshow Bob]

Given that there are two parties to every trade, who is buying?

Will there be some interesting ssh notices bubbling up in a few weeks?

Two major holders have 59% of the company.

Wonder where is Bright Food in all this and their thought pattern?

At least their other major NZ investment is going OK.....at a (historic) PE of 2.4.......

[winner69]

Paying $5.10 a share a short time back for a company heavily in debt and so reliant on ATM, in one way makes ATM look like even better value. Less capital intensive and close to $800m in the bank, plus seemingly better management. Also appears that SML bear the brunt of increasing dairy costs and surplus dairy supply.
Perhaps A2's management aren't all that bad after all, they appear to have been quite diligent in constructing a supply agreement with Synlait which appears to be heavily weighted in A2's favour.

(disclosure: Im not a holder of SML).

Just as well A2 won’t be booking the loss of value on their Synlait investment through the P&L

Possibly turn their full year into a loss (probably quite a bit movement from June last year)

[Beagle]

Just as well A2 won’t be booking the loss of value on their Synlait investment through the P&L

Possibly turn their full year into a loss (probably quite a bit movement from June last year)

"Fabulous" move by Herdlicka, freshly minted as a CEO she couldn't wait to get her hands in the cookie jar and make this "brilliant" investment. ATM shareholders must still be thrilled with her far thinking foresight. https://www.nzx.com/announcements/321685

[Gregnz]

"Fabulous" move by Herdlicka, freshly minted as a CEO she couldn't wait to get her hands in the cookie jar and make this "brilliant" investment. ATM shareholders must still be thrilled with her far thinking foresight. https://www.nzx.com/announcements/321685

I doubt they forecast Covid happening when they made that investment back in August 2018. Hindsight is a great thing

[winner69]

As at June 2020 A2 had 35.575m SML shares at average of $7.00. Share price then was $7.10

They got another 7.778 m shares in capital raise so have 43.353 at average $6.66

So at $3.59 they are sitting on a $133m paper loss - they booked $65.7m of this at half year so have heaps more to account for in full year

Just as well this goes through Other Comprehensive Income and not Profit ....but does reduce the Equity value.

[Gregnz]

As at June 2020 A2 had 35.575m SML shares at average of $7.00. Share price then was $7.10

They got another 7.778 m shares in capital raise so have 43.353 at average $6.66

So at $3.59 they are sitting on a $133m paper loss - they booked $65.7m of this at half year so have heaps more to account for in full year

Just as well this goes through Other Comprehensive Income and not Profit ....but does reduce the Equity value.

Agreed, but quite meaningless unless they are actually plan to sell their SML stake? I also assume A2, being a substantial holder, know more than we do with regard to the 'global category leader' which will supposedly make a positive contribution to SML earnings in the future. A2 management obviously see value in retaining a sizeable stake?

[winner69]

Fonterra lift farm gate by 40 cents kgms - suppose Synlait need to follow

Fonterra says “A $7.60 per kgMS forecast Farmgate Milk Price also increases our input costs putting further pressure on
our earnings in the second half of the 2020/21 financial year. More details on our earnings will provided at
our half year results on 17 March.

Suppose this applies to Synlait as well .... no wonder they don't want to guess how big the LOSS is going to be

[Ferg]

Also posted in the ATM thread:

TLDR: statistics says you cannot predict the SP movement of SML based on the SP movement of ATM and vice versa, although they are pretty much in lock step with eachother so far for 2021.

I did some work on the correlation between the closing price of SML versus ATM. I also broke it down by year and also tried each stock leading the other by 1-5 days, also for each year.

The overall correlation between the two from 2017-2021 is +0.47. In other words about half the time each stock moves in the same direction as the other on a daily basis.

Looking at the different years, 2021 has the 2nd highest correlation at +0.82, the years 2018-2020 had correlations less than +0.5 and 2017 was +0.98.

Advancing each stock relative to the other by 1-5 days generally results in lower correlations versus those where we compare the closing prices on the same day. In other words, the movement of one stock cannot be used to predict the daily/weekly movement of the other. Although I note there was a slightly increasing correlation for ATM leading SML in 2018, but it was still less than +0.5.

Summary data FYI:



Correlations
= Date
ATM+1
ATM+2
ATM+3
ATM+4
ATM+5
SML+1
SML+2
SML+3
SML+4
SML+5


Daily Close 2017-2021
0.47
0.47
0.46
0.46
0.45
0.45
0.47
0.47
0.47
0.47
0.47


Daily Close 2021
0.81
0.79
0.77
0.74
0.69
0.64
0.76
0.73
0.68
0.62
0.58


Daily Close 2020
0.36
0.35
0.35
0.34
0.34
0.34
0.36
0.36
0.36
0.36
0.36


Daily Close 2019
0.22
0.20
0.17
0.14
0.11
0.09
0.22
0.22
0.22
0.22
0.22


Daily Close 2018
0.41
0.43
0.44
0.45
0.46
0.47
0.39
0.37
0.34
0.31
0.27


Daily Close 2017
0.98
0.98
0.98
0.98
0.98
0.98
0.98
0.98
0.98
0.98
0.97


Monthly Close 2017-2021
0.45

[chrisw]

Fonterra lift farm gate by 40 cents kgms - suppose Synlait need to follow

Fonterra says “A $7.60 per kgMS forecast Farmgate Milk Price also increases our input costs putting further pressure on
our earnings in the second half of the 2020/21 financial year. More details on our earnings will provided at
our half year results on 17 March.

Suppose this applies to Synlait as well .... no wonder they don't want to guess how big the LOSS is going to be

It depends on how well the sales team have been doing at moving commodity powders relative to Fonterra. In the industry the FGMP which is largely set based on Fonterra's performance means that if Synlait have sold a similar percentage of volumes and had a similar hedging policy then it will be less of a problem when it comes to profit (as higher FGMP driven by higher sales prices at GDT). Fonterra have in the past (FY14) paid under the FGMP when it was deemed prudent to do so and if profitability is threatened they may do so again. It is likely that SML is similarly not obligated to pay the FGMP - the risk is a loss of suppliers in time if it is too far below however.

At the revenue side of things the biggest problem remains a2 and a lack of customer diversification. I think any investor in ATM should keep an eye on SML announcements as infant formula production needs to be planned a long way in advance. Based on the most recent announcement it would seem that they have lost confidence in the certainty of the forecast coming from a2 and are 'battening down the hatches'. The half year will be interesting to see where costs have been adjusted in response to this demand shift. There have been rumours of a restructure, but nothing has been reflected in the executive team as of yet.

As was pointed out above the advantage of a2 not owning manufacturing facilities (well to date anyway) is that their costs track nicely with demand (no non-cash depreciation costs). When was demand was increasing they even got their manufacturing partner to build new facilities - now that it is dropping they can shrug their shoulders. Even now with a 20% shareholding they are only bearing 20% of impact from their demand changes. However, I would imagine that any volume discounts that had been negotiated would be gone and so margins may not be a fat for them either.

The key question with Synlait remains whether or not the sales team can find other customers or not to fill the capacity with high margin products. With a cost base readjustment they could go the Open Country Dairy route and focus on efficient production of commodities versus Fonterra, but I think the more interesting business remains the higher margin powders they are set up for.

[winner69]

SML share price almost back to where it was before the guidance withdrawal

Maybe some were stupid thinking withdrawing guidance is the same as a profit downgrade

[BlackPeter]

SML share price almost back to where it was before the guidance withdrawal

Maybe some were stupid thinking withdraing guidance is the same as a profit downgrade

Maybe, maybe not.

What makes you think the market is righter today than it was on the day of the last announcement?

[Sideshow Bob]

https://issuu.com/farmersweeklynz/docs/fw_23-03_issuu/1?ff&showOtherPublicationsAsSuggestions=true

page 10

Bit confused. SML haven’t announced and the share price mentioned are wrong? Ie states low of $4.50 but now $3.75.

Might be Friday night and a bit slow.....:confused:

[Scrunch]

https://issuu.com/farmersweeklynz/docs/fw_23-03_issuu/1?ff&showOtherPublicationsAsSuggestions=true
I
page 10

Bit confused. SML haven’t announced and the share price mentioned are wrong? Ie states low of $4.50 but now $3.75.

Might be Friday night and a bit slow.....:confused:

The article is dated 23 March 2020 (not 2021).
From direct broking's share graph, the share price briefly dipped below $4.50 in March 2020 before rebounding with the market. If the article has been written two weeks later it would probably have referenced a $6 or $7 share price and would have been easy to tell it was old info.

[Sideshow Bob]

The article is dated 23 March 2020 (not 2021).
From direct broking's share graph, the share price briefly dipped below $4.50 in March 2020 before rebounding with the market. If the article has been written two weeks later it would probably have referenced a $6 or $7 share price and would have been easy to tell it was old info.

Thanks Scrunch - I should have known better - what a loser!! :scared:

I clicked a link that should have had current version, and was doing it on my phone, so date obviously didn't stand out.

Anyway, one year on, will be a much worse report coming up.....

[winner69]

Operations head guy didn't stay very long -- only started 16 months ago

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/369471/342782.pdf

[winner69]

Share price higher than before the profit warning

Mind you Fidelity have been buying up this month .... obviously not worried about impending loss

Or maybe they keen because of Chinese connections

[winner69]

Amazing how that buying by Fidelity boosted the share price lately ..they prob stopped and the share price sinking again.

[Balance]

Amazing how that buying by Fidelity boosted the share price lately ..they prob stopped and the share price sinking again.

Fidelity is huge - humongous - dealt with them before and each team is allocated several billions of dollars to invest, with each single investment to be a minimum of US$100m.

They do not chop & change their stock selections year to year.

Depending on how much they have invested in SML so far, they could well have a few more to buy.

[Beagle]

Operations head guy didn't stay very long -- only started 16 months ago

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/369471/342782.pdf

Main concern is obviously that he was not happy they haven't painted the entire exterior of all their facilities bright pink. Went past the new Pokeno facility last weekend. White is not a very on trend colour is it !

[Siyamalan]

Synlait is probably sliding towards $3-3.5

Results tomorrow will reveal how much Synlait relies on ATM to be profitable (revenue may be painting a false picture and other clients are just milking Synlait)

[silverblizzard888]

Google definitions states: Pink represents friendship, affection, harmony, inner peace, and approachability. Pink is the official color for little girls and represents sugar and spice and everything nice. Pink is the sweet side of the color red. (I think the red share price is part of the rebranding and its working!)

Anyone voting a rebranding to lime green? (Profitable pastures?)

[ratkin]

This forum should be fun today

[bull....]

This forum should be fun today

esp the people who say its all great

anyway its a terrible result wouldnt surprise me to see a loss making operation at some stage.

[winner69]

As expected the full year will result in a LOSS - how big a LOSS too early to guess says Leon

but no worries and we should think of the future -


“We will need time to get through this, but we remain confident about our future. Our investment phase is complete. We have the capacity, capability, and customer base to generate significant value. COVID-19 hit us late, but we will emerge from the pandemic a stronger, more sustainable Synlait.

“Despite the short-term challenges, the fundamentals of our purpose, ambition and strategy remain the same, and the opportunities ahead are exciting. Our team is mobilising around new opportunities that generate growth, value, and efficiencies.”



Could be good buying in the $2's sometime

[winner69]

Operating Cash Flow negative 69m and capex of 70m gives cash burn of 140m

There'sa fair chunk of the cap raise cash gone in 6 months

[winner69]

Cool graphic in the preso

Love the ? -- could mean anything

[winner69]

But the answer is revealed later

Full marks for creativity in producing this graphic

[Balance]

Operating Cash Flow negative 69m and capex of 70m gives cash burn of 140m

There'sa fair chunk of the cap raise cash gone in 6 months

That’s why they did the capital raise?

[BlackPeter]

But the answer is revealed later

Full marks for creativity in producing this graphic

Well, the graph clearly conveys that the future is in shades of pink ... ;):

Not sure though, whether this is good or not :confused::

[winner69]

I'll get in first

Synlait's current predicament is nothing to do with ESG stuff (as it seems to be called)

Without that stuff Synlait doesn't really have a future

[BlackPeter]

Well, the graph clearly conveys that the future is in shades of pink ... ;):

Not sure though, whether this is good or not :confused::

On a second thought ... I noticed the first and the last page of the chair and CEO review are grey, not pink.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/369837/343220.pdf

Just hope they won't change to "Shades of Grey" ... won't they?

[BlackPeter]

Not a pretty picture:

12397


though - the good thing is HY21 NPAT is - while minute - still positive. Sounds like they are not that sure about the second HY ...

[winner69]

Not a pretty picture:

12397


though - the good thing is HY21 NPAT is - while minute - still positive. Sounds like they are not that sure about the second HY ...

Will need some creativity to make the H2 LOSS look pretty

Negative amounts with positives never seem to work on a column chart

[BlackPeter]

and talking about not so pretty pictures ... I guess red would be appropriate for the cashflow chart, but pink? Really?

12398

[winner69]

and talking about not so pretty pictures ... I guess red would be appropriate for the cashflow chart, but pink? Really?

12398

And company values are generally calculated on DCFs ....where does one start ....hmmm

[BlackPeter]

Good news is - their net debt dropped slightly from $525m to $485m. These capital raises do really work, don't they?

[Sideshow Bob]

Good news is - their net debt dropped slightly from $525m to $485m. These capital raises do really work, don't they?

Raised $200m, debt down by $40m.

Beautiful.......

[winner69]

Raised $200m, debt down by $40m.

Beautiful.......

And obviously talking to banks ...just in case

While all banking covenant ratios were met during HY21, Synlait has proactively engaged with its banking syndicate to increase its leverage ratios to manage any risk at the end of FY21. The company’s FY21 business plan is fully funded by its current banking syndicate.

[silverblizzard888]

Simply a stone throw away from another capital raise if things don't improve.

[Beagle]

Simply a stone throw away from another capital raise if things don't improve.

No worries, promise to paint the exterior of all their processing facilities in shocking pink, hand out free pink attire at a special meeting to all shareholders and investors will be happy to tip in another $1,000 million this time. Who needs real earnings when there's such incredible ESG benefits to staff and the planet who according to Synlait are equally as important as shareholders. Reminds me of the old Meat Loaf song "Two out of three ain't bad" ;)

[silverblizzard888]

No worries, promise to paint the exterior of all their processing facilities in shocking pink, hand out free pink attire at a special meeting to all shareholders and investors will be happy to tip in another $1,000 million this time. Who needs real earnings when there's such incredible ESG benefits to staff and the planet who according to Synlait are equally as important as shareholders. Reminds me of the old Meat Loaf song "Two out of three ain't bad" ;)

Only one mistake in that plan they forgot their shareholders aren't little girls...they almost succeeded, or could I be wrong because the share price is holding up pretty well.

[winner69]

Only one mistake in that plan they forgot their shareholders aren't little girls...they almost succeeded, or could I be wrong because the share price is holding up pretty well.

Some on here are just showing their true colours

[Baa_Baa]

Some on here are just showing their true colours

Back around your $3.40 NTA, or has NTA gone down as well - only $2.76 on NZX?

[winner69]

Back around your $3.40 NTA, or has NTA gone down as well - only $2.76 on NZX?

Book Value now $3.90. ....all that new capital

As cash flow positive need to discount that quite heavily. They have $1.3 million of invested capital so need to make about $110m after tax to cover cost of capital which would justify trading above book value

I’d say 220 is about fair price without being too pessimistic ...but what the heck do I know

[Balance]

Another capital raising on the horizon if things do not improve in the next 12 months.

https://www.stuff.co.nz/business/124689614/synlait-profit-hit-by-weak-demand-from-its-major-customer-a2-milk

Good summation of why SML (& ATM) are in strife - and will be for a while yet :

“It’s a perfect storm for them,” said Brad Gordon, an investment adviser at Hobson Wealth Partners. “They have just come through a significant investment period, their cost of inputs, milk prices, are high, and their biggest customer a2 is going through a destocking process and therefore volumes are down.

“All three factors are weighing on that stock and I think there’s probably some concerns around debt levels coming to the fore given they are at the end of that investment cycle.”

[winner69]

Brad gordon says - That’s left a2 Milk with higher inventory, which it is selling down before it taps Synlait for more product.

Synlait seems to have excessive levels of inventory as well....hmmm

[winner69]

NOVEMBER 2018

. IMPRESSIVE RESULT APPLAUDED BY SHAREHOLDERS


Don’t think that will be happening again .....amazing how much in love with Synlait punters were back then.

[Sideshow Bob]

Synlait ponders lack of profit | Farmers Weekly (https://farmersweekly.co.nz/section/dairy/view/synlait-ponders-lack-of-profit)

[winner69]

What a shocker - Leon has packed a sad and leaving

And Synlait falling into the A2 trap of bring back the previous CEO as a caretaker. A directionless painful period coming up for Synlait I reckon

[Balance]

What a shocker - Leon has packed a sad and leaving

And Synlait falling into the A2 trap of bring back the previous CEO as a caretaker. A directionless painful period coming up for Synlait I reckon

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AFT/370467/343966.pdf

Glory days are over.

What do they say about ‘when things are tough, the tough gets going but the soft goes!’

[Quantitative Easing]

Under Leon Clement Synlait has been very inclement. Glad i sold out at $11.

[winner69]

Leon was just unlucky in his few short years at Synlait

Going to see if he's luckier elsewhere I suppose

[BlackPeter]

What a shocker - Leon has packed a sad and leaving

And Synlait falling into the A2 trap of bring back the previous CEO as a caretaker. A directionless painful period coming up for Synlait I reckon

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AFT/370467/343966.pdf

I think you meant to use this link: https://www.nzx.com/announcements/370464

... or did you wanted to imply that they washed him away?

On a second thought: this hand sanitizer might come handy to clean out the company after Leon's departure ... though I doubt it will help to remove all the pink colour.

Jeez - just imagine repainting all these trucks and buildings in some more successful colour ... this might be costly.

[BlackPeter]

Leons achievements ... ???

12425

Sad. Did Leon really start in September 2018? This was when the SML SP reached all time Highs well above $12 Now the same share trades around $3.50.

They say it takes normally 5 years for a CEO to change a companies fortunes. The direct correlation with CEO tenure and SP drop in this case is frightening - i.e. either Leon was very effective and fast or very unlucky.

I am sure it is just an unfortunate coincidence and bad luck.

[winner69]

Leons achievements ... ???

12425

Sad. Did Leon really start in September 2018? This was when the SML SP reached all time Highs well above $12 Now the same share trades around $3.50.

They say it takes normally 5 years for a CEO to change a companies fortunes. The direct correlation with CEO tenure and SP drop in this case is frightening - i.e. either Leon was very effective and fast or very unlucky.

I am sure it is just an unfortunate coincidence and bad luck.

Nice chart Peter

When Leon started Synlaits market cay was $2.1 billion - no wonder there was a standing ovation at the ASM a few months later

Today market cap is $0.75 billion

How unlucky can one get

[silverblizzard888]

Nice chart Peter

When Leon started Synlaits market cay was $2.1 billion - no wonder there was a standing ovation at the ASM a few months later

Today market cap is $0.75 billion

How unlucky can one get

You could call it unlucky or the lack of prudence on his decision making on how capital was used. There were a few acquisitions that never really brought the company forward at all, changes that could be highlighted in 'pink' that seemed to distract the focus of the company and when they hit a rough patch it was merely like pulling a loose thread.

[Scrunch]

Something doesn't smell right. 3 weeks notice to leave a position like CEO is very short. Its also very strange to provide an outgoing CEO list of achievementsas a public notice. I wonder how much regret there really was in accepting his resignation.

[winner69]

...and only a few weeks after the 'Director of Operations' resigned as well

[Balance]

Something doesn't smell right. 3 weeks notice to leave a position like CEO is very short. Its also very strange to provide an outgoing CEO list of achievementsas a public notice. I wonder how much regret there really was in accepting his resignation.

Hope it’s not a case of him suffering a nervous breakdown or something like that.

[winner69]

Hope it’s not a case of him suffering a nervous breakdown or something like that.

Hope so as well - that would be a dreadful outcome

Wouldn't wish that on anybody

[Baa_Baa]

The board would be privy to and agreeing to any and all of those ‘accomplishments’. Looks more like the board scapegoating the CEO for implementing all the stuff that shareholders obviously didn’t like judging by the share price. Could be tough finding a new CEO role with a listed company! 🤔

[RTM]

I have expressed a wide range of concerns regarding very poor governance, extreme risk taking with Pokeno, extremely poor and very "economical" shareholder communication about pertinent factors, debt level's, share price reacting before announcements, (leaky ship), very slow and lack of progress with other brand accreditation, poor financial performance and last but certainly not least expending vast amounts of management time and resources getting accreditation to elevating people and the planet to the same level as shareholders all without obtaining a special resolution for their radical ESG approach.

With all due respect I think you have the cart before the horse. The share price is the market reacting to the above, not the other way around.
Now it appears we may be able to add very poor due diligence of operational systems regarding the cheese factory acquisition to the list. Why would this surprise anyone with a company so single mindedly laser focused on all things ESG ?

I put it to you and others that Leon is an extremely poor CEO and has lost any mandate he had to manage this company. He needs to go.

As our Beagle seems to be muzzled.....I thought it was worth drawing everyone's attention to the post above. While I certainly don't speak for Beagle....I am sure he would have plenty to say on the subject if he was able.

[peat]

As our Beagle seems to be muzzled.....I thought it was worth drawing everyone's attention to the post above. While I certainly don't speak for Beagle....I am sure he would have plenty to say on the subject if he was able.

Thanks for reminding us about the dawgs views - I mean I knew he was not holding positive views but that was a very strong bark!

One thing this company and ATM remind me so loudly about is the risk and reward trade off involved in any equity and how so often there IS both side of the coin and at a matching level.

[Rawz]

Hope the Beagle is let out of the dog house soon so that the bark is heard once again

[winner69]

Made with Better Milk

A good step forward down the differentiation path

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/371279/344935.pdf

[BlackPeter]

Made with Better Milk

A good step forward down the differentiation path

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/371279/344935.pdf

Leon's last hurrah?

Anyway - good reminder that he actually is still around, I already nearly forgot about him. When is the new CEO scheduled? Time somebody removes with an executive decision this ugly pink font from the SML announcements ...

[winner69]

UPGRADE

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/371340/345004.pdf

[BlackPeter]

UPGRADE

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/371340/345004.pdf

... Jeez, you nearly got me :):

[mcdongle]

I hear John Penno is already back going through every department asking awkward questions..

[winner69]

I hear John Penno is already back going through every department asking awkward questions..

Penno, as a Director, should have been asking ‘awkward questions’ before now

[mcdongle]

Penno, as a Director, should have been asking ‘awkward questions’ before now

This is true...

[Baaarney]

For those interested in the RMA/property law aspects of the Supreme Court decision there is an article in the April edition of the Resource Management Journal published by the RMLA (Resource Management Law Association of New Zealand Inc)
https://rmla.org.nz/product/rm-journal-april-2021/

[Leftfield]

For those interested in the RMA/property law aspects of the Supreme Court decision there is an article in the April edition of the Resource Management Journal published by the RMLA (Resource Management Law Association of New Zealand Inc)
https://rmla.org.nz/product/rm-journal-april-2021/

Thanks for posting...... much better than some of the speculation on this thread at the time.

[winner69]

SML share price action not too bad today on a sour milk day

[Roberto the Brickie]

Penno, as a Director, should have been asking ‘awkward questions’ before now
I disagree here, if John Penno is a director then he is responsible for governance. They set the direction and the strategies for the company. Management then implement these strategies. It is management's responsibility to ask the questions. Therefore good to hear that he is doing what we expect of management.

[BlackPeter]

I disagree here, if John Penno is a director then he is responsible for governance. They set the direction and the strategies for the company. Management then implement these strategies. It is management's responsibility to ask the questions. Therefore good to hear that he is doing what we expect of management.

It is the job of the board to hire (and fire) the CEO as well as review the CEO's performance. Given that Leon (as far as we know) went on his own volition does it appear the board was well asleep over the last 3 years or so.

They hired the wrong man and they didn't notice that for two and a half years despite plenty of red (or should I say pink?) flags waving in the wind.

Pretty sad, isn't it?

While I used to like and respect John Penno as CEO - he clearly did not perform as part of a weak (or sleeping or both) board. Lets hope for Synlait that they stop at some stage to follow A2 and its depressing example ...

[peat]

SML share price action not too bad today on a sour milk day

milk sour all round
12493

[gbogo]

my atrociously-drawn lines on the monthly chart suggest 50c or lower target price..! 12495

[peat]

SP<NTA now tho?

[BlackPeter]

SP<NTA now tho?

NTA was $3.36 as per 2020 annual report. So yes, slightly below book value.

Question is however - how much cents in the dollar would you get for a milk processing plant, if milk processing falls out of fashion?

[peat]

if milk processing falls out of fashion?

its NZ tho? land of milk and honey.
and its stainless steel. so wont deteriorate much?

I've been burned once on SML and wont be again. so just sayin that I noticed stated NTA had been breached....

[BlackPeter]

its NZ tho? land of milk and honey.
and its stainless steel. so wont deteriorate much?

I've been burned once on SML and wont be again. so just sayin that I noticed stated NTA had been breached....

You are right. Assuming the plant is able to pay rates, interest and wages even without selling truckloads of A2 Platinum I agree that this might at some stage turn into a deep value game.

For my feeling however is this a bit too early for that - and it would be nice as well to see not just the backside of Leon, but from the people who put him not just into power and didn't manage him appropriately, but who created already many of the issues Leon failed to fix (like the total dependency on A2-Milk and the Pokeno saga).

I don't see a reason why this company could not get back on track given a good strategy and a capable board and leader.

Who knows - maybe I buy in November a handful of shares as entry ticket into the AGM? Might be interesting this year ....

[peat]

You are right. Assuming the plant is able to pay rates, interest and wages even without selling truckloads of A2 Platinum I agree that this might at some stage turn into a deep value game.


and service the debt!!

edit - yes you said interest I see now

[mcdongle]

What are they going to do when A2 get their own plant up and running i wonder

[dreamcatcher]

What are they going to do when A2 get their own plant up and running i wonder

SML has the SAMR .............NOT ATM

[mcdongle]

They are obviously going to process milk what will they do with it...........This is the rumour i am hearing from people

[ralph]

mcdongle have you not been looking into the big new customer in Asia etc , they wont need atm soon but may be owned by them !!

[mcdongle]

Yes ralph. Just not sure where Synlait are going at the moment. There are still lots of people leaving the co. Big new customer not a dairy company though is it

[Roberto the Brickie]

Announcement of CFO leaving Synlait, apparently the Finance team were advised last night that Angela would not be at work today and that Rob was stepping up. Now starting to wonder about the board as they would have approved her appointment.
This was done within a week of John Penno stepping back in as CEO, I am starting to wonder why he was being paid a directors fee.

[gbogo]

that explains the sharp sell-off EoD yesterday. Will there be a stewards? Of course not...

[bull....]

downgrade again only a matter of time

[Sideshow Bob]

Synlait appoints Angela Dixon as Chief Financial Officer - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/349630)

Not even 1 year in the job. Bit of a poisoned chalice and must be a difficult environment....

[BlackPeter]

Announcement of CFO leaving Synlait, apparently the Finance team were advised last night that Angela would not be at work today and that Rob was stepping up. Now starting to wonder about the board as they would have approved her appointment.
This was done within a week of John Penno stepping back in as CEO, I am starting to wonder why he was being paid a directors fee.

https://www.nzx.com/announcements/372175
https://www.synlait.com/news/synlait-appoints-angela-dixon-as-chief-financial-officer/

This was a short gig, wasn't it? Angela only started in June 2020 as CFO but already leaving in May 2021 (and apparently without notice) ... one sort of wonders what's behind?

Probably just too many pink numbers, but who knows? Shows that even angels can't save Synlait ... or is it a good sign if they are leaving? I guess some birds are taken as bad omens, aren't they?

[winner69]

At this rate Penno will be the only one left to run the ship

That would be a disaster

[winner69]

Announcement of CFO leaving Synlait, apparently the Finance team were advised last night that Angela would not be at work today and that Rob was stepping up. Now starting to wonder about the board as they would have approved her appointment.
This was done within a week of John Penno stepping back in as CEO, I am starting to wonder why he was being paid a directors fee.

That doesn't sound too good

[winner69]

Former CFO Greenwood was reported as saying this when he handed over to Angela - main advice, however, is to be prepared to find out the business is a lot more complex than it might appear from the outside.

That Angela doesn't seem to be one who jumps ship

If Roberto is right about her 'not being at work today' something up

Maybe spreadsheet showing stock levels all wrong and 100m plus to be written off ...


.....or worse still we should be thinking of Angela's well being. Hope this not the case

[BlackPeter]

Former CFO Greenwood was reported as saying this when he handed over to Angela - main advice, however, is to be prepared to find out the business is a lot more complex than it might appear from the outside.

...



here is the article. Makes interesting reading.

https://farmersweekly.co.nz/section/dairy/view/departing-synlait-cfos-hell-of-a-journey

Some more of his citations:

“You are going so fast and trying to change the wheels on the bus while you are going down the motorway at 100 miles an hour is pretty difficult.”

“Working in a growth company you learn to sleep faster,” he said.





.....or worse still we should be thinking of Angela's well being. Hope this not the case

Agree with your last sentence - however, can't really imagine a scenario where a caring employer would accept a surprise resignation on such a short notice and make such a meaningless announcement if health issues are involved. They do have a duty of care, you know.

Anyway, probably not the right thing to expand at this stage on social media.

[winner69]

here is the article. Makes interesting reading.

https://farmersweekly.co.nz/section/dairy/view/departing-synlait-cfos-hell-of-a-journey

Some more of his citations:

“You are going so fast and trying to change the wheels on the bus while you are going down the motorway at 100 miles an hour is pretty difficult.”

a.

Have the wheels fallen off the bus?

[BlackPeter]

Have the wheels fallen off the bus?

Great question ... maybe they did :):

[Rawz]

Sheesh New Zealand famous for it's milk production yet Synlait and ATM in big big trouble. Wouldn't want to own either at this point. And the 3rd milk co on the NZX, Fonterra, I have no interest in even looking at that as an investment given the troubles the other two milk co's are having. Sad!

[Marilyn Munroe]

Opportunity knocks;

https://www.dailymail.co.uk/femail/article-9576201/Nationwide-shortage-baby-milk-formula-leaves-parents-panicked.html

Boop boop de do
Marilyn

[Beagle]

How many senior exec's have quit or been fired in the last few months now ?, sorry I have lost count.
Has all the "C" suite gone ?...like rats abandoning ship before it sinks ?

What exactly are they going to be doing when ATM shifts as much IF production to MVM as it can ?

[Scrunch]

How many senior exec's have quit or been fired in the last few months now ?, sorry I have lost count.
Has all the "C" suite gone ?...like rats abandoning ship before it sinks ?

What exactly are they going to be d6oing when ATM shifts as much IF production to MVM as it can ?

I was wondering if the CFO had had enough of the environmental and social stuff and wanted to get back to trying to improve profitability and shareholder returns. This unfortunately necessitated a change of employers. Also the tag of "Not price sensitive" is an interesting one to place on the CFO leaving!!!!

[ralph]

A more obvious conclusion is the senior leadership team decided the cfo was not competent enough and acted ,as they should .
But agree the p c greener native fauna bull is not important to shareholders and profit is .

[Beagle]

I was wondering if the CFO had had enough of the environmental and social stuff and wanted to get back to trying to improve profitability and shareholder returns. This unfortunately necessitated a change of employers. Also the tag of "Not price sensitive" is an interesting one to place on the CFO leaving!!!!

Market sure didn't see it that way taking it down 2.6% to a fresh multi year low. Interesting times for Synlait. So if my memory serves me correctly, (and I'm not sure it does) we've had the chief of operations or some such similar title leave, followed by the CEO and CFO. The mind boggles as to what the culture of the place is like now :eek2:...not with a 40th foot barge pole...Penno's got quite a mess to clean up that's for sure !!!

[Siyamalan]

Synlait boat is desperately in need of another capital raise.

[ralph]

Just makes shareholders so proud of their P.C (pink coloured ) culture.

https://www.youtube.com/watch?v=dDXAaVPegqA

[winner69]

Awkward

Synlait investigating 'white supremacist' worker

https://www.stuff.co.nz/business/125207126/synlait-investigating-white-supremacist-worker

[ralph]

Awkward

Synlait investigating 'white supremacist' worker

https://www.stuff.co.nz/business/125207126/synlait-investigating-white-supremacist-worker

:D What's the world coming too lol ,definitely not politically pink enough ,that will send the shares plummeting

[Panda-NZ-]

:D What's the world coming too lol ,definitely not politically pink enough ,that will send the shares plummeting

Needs to be sent to complete a course from a Phd in gender and identity studies right away.

[BlackPeter]

Awkward

Synlait investigating 'white supremacist' worker

https://www.stuff.co.nz/business/125207126/synlait-investigating-white-supremacist-worker

Hmm - white supremacist. First thought this must be a person who thinks the color white is superior, which would not be that unusual for somebody working in a company producing lots of white and highly expensive powder, though admittedly - following the companies policies he should favor pink over white. Pink really is supreme, but maybe he can't read ...

However - looks like he is just another plain vanilla racist. Hard to believe how many of these brainless idiots run around in this friendly country.

[ralph]

Hmm - white supremacist. First thought this must be a person who thinks the color white is superior, which would not be that unusual for somebody working in a company producing lots of white and highly expensive powder, though admittedly - following the companies policies he should favor pink over white. Pink really is supreme, but maybe he can't read ...

However - looks like he is just another plain vanilla racist. Hard to believe how many of these brainless idiots run around in this friendly country.

Well that's good enough for me black Pete ,if you have labelled this guy using your opinions and ideology and he is not consentient with your views Then he obviously deserves sacking and to lose his livelihood etc. teach him aye :confused: 100% agree as long as it does not affect the sp and the pink cultures

[Panda-NZ-]

People are removed from their jobs all the time for lack of cultural fit among other vague reasons. Seems though that this is a tad more legitimate I think.

[Panda-NZ-]

NZ dairy company management recently. Fonterra, ATM, synlait all have their issues.

[ralph]

NZ dairy company management recently. Fonterra, ATM, synlait all have their issues.
Yes for sure & I do not think their political bias is or should be one of them pink supremacists apart of course

[trader_jackson]

https://www.nzx.com/announcements/372628
Another downgrade, as expected, will be surprising if the share price doesn't drop below $3 today... hard to believe just 6 months ago they were raising capital at $5.10

[winner69]

I did say they were heading for a LOSS even though they didn't want to mention that terrible word ..only saying "overall FY21 NPAT result will be approximately half that of the FY20 NPAT result, will now not be attainable." and then a few weeks later "breakeven"

But $30m LOSS is pretty significant

Couple of months to year end so more room for bad news

[Habits]

From the announcement "...then resetting"

Sounds ominous such as clear out the cupboards of all provisions and complete the write downs