NZ RegCo, the regulatory wing of the NZ Stock Exchange, says it has placed Synlait Milk in a trading halt for its quoted equity and debt securities at the request of the company.

“Synlait has requested a trading halt of its ordinary shares and quoted bonds on the NZX Main Board and ASX to provide it with additional time to properly consider new information it has received which may require it to revise its previously issued guidance to the market,” NZ RegCo said.

At its last guidance on March 27, Synlait said it expected a net profit of net profit after tax of $15m-$25m, well below market expectations.

Synlait’s first half net profit fell by 83 per cent to $4.8m, driven by reduced forecast demand for infant formula including from its biggest customer, a2 Milk.

Revenue fell 3 per cent to $769.8m and net debt jumped by 32 per cent to $518.6m in the six months to January 31.

Earnings before interest, taxes, depreciation, and amortisation (ebitda) were down 25 per cent at $51.5m.

“Advanced nutrition forecast demand and production has been reduced or delayed following forecast changes by Synlait’s largest customer during the first half and more recently by other customers,” Synlait said at the time.

 “Operational stability and cost challenges are evident across Synlait, including a reduction in milk processed, raw material supply challenges, carbon dioxide shortages, an extremely tight labour market, extreme weather events, and high inflationary costs pressures,” it said.

Synlait is about 20 per cent-owned by a2 Milk.

The company is also a2 Milk’s sole supplier of infant formula.

Shares in Synlait last traded at $2.14, having dropped by 37 per cent over the last 12 months.