SML at all time low. Got to be a bargain at this price but not willing to buy any more until we get some news... will they deliver on 10-15m NPAT in this half?
Come on SML, wouldn't hurt to confirm guidance.
Disc: Shareholder.
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SML at all time low. Got to be a bargain at this price but not willing to buy any more until we get some news... will they deliver on 10-15m NPAT in this half?
Come on SML, wouldn't hurt to confirm guidance.
Disc: Shareholder.
Don't hold your breath
Synlait have spent countless millions expanding their infant formula business, but still don't have any major clients. China is failing to fire. Lactoferrin doesn't seem to be delivering either. This all equals much higher debt servicing costs, but not much additional revenue.
Meanwhile commodity prices have crashed, which previously contributed significantly to their bottom line.
Expect this to be reflected in a lower milk payout price announcement soon.
I hear ya. There are plenty of reasons not to like Synlait, big cap-ex, delays, poor communication with shareholders, dissapointing results etc. I've given them a chance this half to get things right.
I understand how commodity price would effect top line revenue but why should that significantly effect bottom line? It should favour them right?
They continue to build the infrastructure for a value-add business - in the last 2 years they have built new blending, canning, additional spray drying capacity, laboratory, administration block, lactoferrin plant etc
But their main revenue appears to come from commodities
High commodity prices mask a lot of sins. But current sell prices are well below cost of production, so there is nowhere to hide the growing debt servicing costs
On the other side of the ledger, the price they pay farmers for milk must be competitive with Fonterra, Westland and Yili, maybe even Open Country Dairy or the farmers will simply supply another dairy company
They are in a real tough place - geographically the most contested milk in NZ, infant formula into China is a constant uphill battle against changing regulations, and commodities at decade lows. At least they have some protection against El Nino by way of irrigation......
Annual result not until 22 Sept... any chance of some guidance before then?
http://www.nzherald.co.nz/business/n...ectid=11496681
[QUOTE=Hectorplains;586216]Annual result not until 22 Sept... any chance of some guidance before then?
Well they did provide guidance at the end of March of $10-15M for the full year. Given that they were flat for the first half, all of that profit would come from H2.
If you look on the optimistic side, when they gave that outlook they were 9 months into the year and all the way through Q3. They should have had a good handle at that stage on end of year results which is quite a wide guidance.
Low dairy prices may help Synlait as they do value add.
I personally think it's oversold and the current trade is based on fear / media / Fonterra woes. I bought more this week.
I might be very wrong and Synlait may post terrible result in a few weeks time which would be very bad given guidance at end of q3. On the other hand if they hit upper range of guidance and can continue to make similar profits at each half, current price is way oversold.