Dairy cooperative Fonterra has reported a strong 50 percent increase in its first-half profit, doubled its first-half dividend and announced plans for an $800 million return to shareholders.
Key numbers for the six months ended January compared with a year ago:
In addition to the dividend, Fonterra said it would pay a Farmgate Milk Price in the range of $8.20 to $8.80 per kilogram of milk solids (kgMS).
It also proposed to make a tax free capital return to farmer owners and unit holders of about 50 cents per share, subject to completion of the sale of its Chilean Soprole business.
“The outlook for high quality sustainable New Zealand dairy remains positive.
The cooperative offset a drop in whole milk powder prices by moving more milk into skim milk powder and cream products, Hurrell said.
However, the result was made against a backdrop of ongoing market volatility, which hit its consumer business, Hurrell said.
The foodservice business was more resilient, Hurrell said.
The company’s net debt and working capital improved over the period, and it was able to clear more end-of-year inventory.
However costs increased by 27 percent to $1.4b due to softness in the New Zealand consumer business and Asia brands impairments, increased costs, including inflation and foreign exchange, and last year having a one-off favourable item.
“Our co-op’s scale, diversity and strong balance sheet positions us well to manage these challenges and we will continue to prioritise higher value products and channels to deliver sustainable returns for farmer owners and unitholders.”
Credit: radionz.co.nz
