Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fonterra Introducing New Foreign Exchange Hedging


Fonterra Introducing New Foreign Exchange Hedging Policy

Fonterra Co-operative Group Ltd is strengthening its hedging policy in order to lessen the short-term impact of foreign currency movements on earnings and payout. Changes will take effect for the new dairy season starting on June 1.

In the past, the dairy industry has typically hedged 30-70 per cent of its earnings over a 12 month period, and 0-30 per cent of its earnings over a 13-24 months timeframe.

Under the new policy, Fonterra's earnings for the next 15 months will be fully hedged against any change in the value of the NZ dollar against the US dollar. Although measured in US dollars, the protection will take account of all major foreign currency exposures.

The new policy will mean that payout will be more predictable. However, payout will still be affected by changes in commodity prices, product mix and sales volumes, among other things.

For example, if commodity prices fall, the returns to Fonterra will fall, regardless of whether these are expressed in US dollars or NZ dollars.

A small number of shareholders currently do their own hedging. The new policy will make it easier for them to do so.

Fonterra will provide shareholders each month with information allowing them to calculate their share of the Group's hedging position. Shareholders can then use this information to decide if they wish to offset to any extent Fonterra's hedging position, or hedge their exposures over a longer time period.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news