NZ's Synlait cuts annual loss, inks asset sale deal; shares surge

By Kumar Tanishk

Sept 29 (Reuters) - Synlait Milk SML.NZ reported a much narrower annual net loss on Monday and announced the sale of its North Island assets for NZ$307 million ($177.2 million) to U.S.-based Abbott Laboratories ABT.N, sending its shares surging.

The New Zealand-based dairy firm's shares rose as much as 20.7% to trade at NZ$0.845, posting their biggest intraday gain since February 17, while the broader market .NZ50 was flat. The shares hit their highest level since March 25.

The dairy producer said in a statement that strong customer demand and new product development in the Advanced Nutrition business segment delivered a NZ$21.1 million underlying gross margin increase, while a turnaround from last fiscal year's poor Ingredients business performance also helped the bottom line.

The company announced the divestiture of its North Island assets to healthcare firm Abbott, which is expected to strengthen Synlait’s financial position by significantly reducing debt. The deal is expected to be completed by next April.

The sale allows Synlait to "streamline operations and sharpen its focus on Canterbury, which remains central to its long-term business strategy", said Grady Wulff, a senior market analyst at Bell Direct.

Canterbury operations are vital due to their proximity to dairy farms, established production facilities, and access to key export routes.

Synlait's majority shareholder, Bright Dairy Holding, will irrevocably vote in favour of the transaction, it said.

While Synlait has withheld fiscal 2026 guidance to concentrate on the sale, Wulff added that further portfolio reshaping is possible, with a focus on high-margin segments in the nutritional and premium dairy sectors.

Synlait reported a total net loss after tax of NZ$39.8 million ($22.97 million) for the year ended July 31, after posting a loss of NZ$182.1 million a year earlier.

The company reported an underlying net profit after tax of NZ$0.8 million, versus a loss of NZ$60.4 million last year.

($1 = 1.7325 New Zealand dollars)