Fonterra Co-operative Group saw 14 percent decrease in revenue
Staff writer ▼ | March 25, 2015
Fonterra Co-operative Group announced its half-year results. The first half has been subdued for the Co-operative, due to high volatility and challenging global market conditions, resulting in a 14 percent decrease in revenue, CEO Theo Spierings said.Article continues below
Chairman John Wilson said that given the results achieved in the first half of the year and the continued volatility in international prices, the Co-operative was holding its forecast Farmgate Milk Price at $4.70 per kgMS.
"However, our forecast dividend has been lowered to 20-30 cents per share, resulting in a forecast Cash Payout of $4.90 - $5.00. The board has declared a 10 cent interim dividend."
"Our current milk supply forecast for the 2014/15 season has increased to 1,551 million kgMS, two percent below the 2013/14 season."
"Our consumer and foodservice business in Asia and China source all of their milk from New Zealand and benefited from the lower value of milk, particularly in the second quarter.
"Our Australian and Chilean consumer and foodservice businesses source their milk in market. Their earnings were significantly impacted by higher milk prices within each of these milk pools which squeezed margins. In Australia, Chile and Brazil, the prices paid for milk are influenced by in-market dynamics rather than global prices, so our businesses in these markets have faced higher input costs.
"Meanwhile our Sri Lanka business has turned around and improved earnings after rebuilding the market share lost, following the temporary suspension of our operations last year.
"Despite some challenges, our consumer and foodservice business overall achieved volume growth and improved pricing, together delivering a $91 million increase in our gross margin. Normalised EBIT for consumer and foodservice for the first half was $116 million, an increase of 23 percent on the prior comparable period," said Mr Spierings. ■ What to read next
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