Synlait  Milk is warning of a potential net loss in its half year results

The Canterbury-based milk processor is projecting a 17 to 21 million-dollar loss for the six months to June -- down from a net profit of 4.8 million from the same period, last year.

It's putting the loss down to rising interest rates and operational costs, and lower margins

Ashburton-based Synlait supplier Willy Leferink says it's not a short-term problem, with its share price also dropping.

He says it's a fundamental problem, and they'll have to re-capitalise- but at 68 cents a year, it's hard work.