SML - Synlait Milk Ltd

[kiora]

I am hearing even the biggest ones with 50 % equity being contacted weekly by their banks while being gouged 8.5% interest
"Rising costs, falling revenue

The 2022/23 dairy season was a bad combination of rising costs and falling revenue. DairyNZ estimates that dairy operating expenses in 2022/23 amounted to $8.16 per kgMS, up sharply from $7.23 in 2021/22. The start of the war in Ukraine in early 2022 led to a sharp rise in the cost of diesel and fertiliser, and rampant inflation bumped up the cost of nearly everything else. Fonterra’s payout to farmers for 2022/23 was estimated to be $8.20, down from a record level of $9.30 in 2021/22. These shifts take the average farm from a solid profit in 2021/22 to barely breaking even in 2022/23. Across the dairy farming industry, this amounted to a drop in revenue of $2.0b.

Heading into the 2023/24 season, Fonterra dropped its forecast payout further, to $7, then $6.75, driven primarily by weaker demand from China. The latest drop amounts to a $2.7b fall in revenue for dairy farmers, on top of the $2.0b drop in the previous season. DairyNZ forecasts that costs will ease slightly, taking the break-even point down to $7.51 for the 2023/24 season – an improvement, but still higher than revenue. The reduction in break-even is in part driven by farmers deferring expenditure to match the lower payout."
https://www.infometrics.co.nz/articl...-dairy-farmers

"Global dairy price recovery forecast to be slower than expected - Rabobank"
https://www.nzherald.co.nz/the-count...EA7HG7HRUMUAU/

"A large-scale dairy farming business once worth more than $125 million but placed in receivership last month owes its bank $36.5m, a court judgment reveals.


https://www.nzherald.co.nz/business/...DWHULGYN7QNEM/

[Newman]

The dairy industry needs a strategic A2 policy
https://www.interest.co.nz/rural-new...a2-beta-casein


"To understand the opportunity that New Zealand now faces, the first point is to recognise that a2Milk has trademarks but no blocking patents. Accordingly, there must be renewal and exit clauses within the current licence that lead to an exit strategy with due notice. It would be remarkable if that were not the case".

[billkiapi]

For SML, the trouble started when they bit the hand that fed them. Diversification was the right choice for SML, they executed it very badly and then doubled down with a fight or fights with A2M without the contractual backing. When this all comes out, I reckon we are in for a messy story of ego and vanity for SML to even think they could bluster their way through this

[billkiapi]

With founder gone, prepare for a cap raise is my best guess. With Fonterra exiting consumer, timing ain't great for selling Dairyworks and North Island assets

[Balance]

With founder gone, prepare for a cap raise is my best guess. With Fonterra exiting consumer, timing ain't great for selling Dairyworks and North Island assets

"If people seriously think that SML is going to sell Dairyworks and the NI assets, they obviously do not have the foggiest idea of what's happening behind the scenes."

Yesterday, what my farmer contact in the Waikato who supplies milksolids to SML said when we were discussing the state of the dairy industry.

[Bikeguy]

"If people seriously think that SML is going to sell Dairyworks and the NI assets, they obviously do not have the foggiest idea of what's happening behind the scenes."

Yesterday, what my farmer contact in the Waikato who supplies milksolids to SML said when we were discussing the state of the dairy industry.

Hi Balance, I am genuinely interested in what you are saying, any chance you could share your thoughts on where this is all going? Appreciated👍

[whatsup]

So why wouldnt Graham Hart buy SML along with the Fonterra consumer brands , wrap them together and float the enterprise on the NZX, ASX and what ever other exchange would suit. !!

[Simsee]

So why wouldnt Graham Hart buy SML along with the Fonterra consumer brands , wrap them together and float the enterprise on the NZX, ASX and what ever other exchange would suit. !!

I think you may find Mr Hart may struggle to get investors on board based on previous outcomes

[whatsup]

I think you may find Mr Hart may struggle to get investors on board based on previous outcomes

With his deep pockets he could afford to buy the lot, knock them into shape wait a couple of years , float, take his seed money out and still be left with 40% inside 3 or 4 years.

[RupertBear]

Hi Balance, I am genuinely interested in what you are saying, any chance you could share your thoughts on where this is all going? Appreciated

As a holder I would be genuinely interested to hear Balances thoughts as well