Synlait Milk slumps to 2-year low; NZ shares fall
The S&P/NZX 50 Index declined 17.40 points, or 0.1 percent, to 11,880.84. Within the index, 21 stocks fell, 24 gained, and five were unchanged. Turnover was $167.1 million.
Synlait Milk fell as low as $6.70, and ended the day down 18 percent at $6.80 on a volume on 1.2 million shares, more than 10 times its 90-day average. The milk processor said first-half net profit was down by roughly $10 million, and it lowered its annual outlook to a flat profit at best. Synlait had previously predicted profit growth to at least match the 10 percent growth it achieved in 2019.
Brad Gordon, investment adviser for Hobson Wealth Partners, said while the shares have fallen hard, “it has traded very expensive to its assets base and it's probably now coming back towards a more realistic level."
A2 Milk, which counts Synlait as its major supplier, shrugged off the slump, saying its performance was strong. Its shares were unchanged at $15.80.
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