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

 


Fonterra Increases Payout Forecast


MEDIA RELEASE
13 December 2007

Fonterra Increases Payout Forecast

Fonterra Co-operative Group has lifted its forecast payout for the current season by 50 cents, from $6.40 to $6.90 per kilogram of milksolids. The new forecast comprises an increased milk price of $6.70 and the value component remains at 20 cents.

The Board has also set the interim Fair Value Share price for the 2008/09 season at $7.01, an increase of 22 cents on the current Fair Value Share price of $6.79.

Fonterra Chairman, Henry van der Heyden said: “the higher milk price is due to an increase in milk supply which has flowed through to higher sales volumes at higher prices, but the gains have been somewhat offset by the higher New Zealand dollar.

“The value component of the forecast remains the same. This part of the business continues to be impacted negatively by reduced margins which are a direct result of the higher commodity prices. The negative impact is being balanced by improved performance from our overseas investments.”

Mr van der Heyden said the independent valuers, Duff & Phelps, provided the Board with a valuation range for the Fair Value share of $6.49 to $7.54. The interim price of $7.01 is the midpoint of the valuation.

“The net increase in the Fair Value Share reflects some compression of Fonterra Ingredients’ long term margins, driven by the higher dairy prices. However the valuer has recognised that this is more than being made up for by improvements in Fonterra’s consolidated Australian operations and our Soprole business in Chile. The valuer also recognised additional business efficiencies and cost savings initiatives.”

Fonterra CEO, Andrew Ferrier said the Co-operative was just beginning to see signs of some of the expected supply response to the record commodity prices.

“In particular we’re seeing growth in United States skim milk powder production. We think this will factor into the market over the short to medium term and will bring a gradual softening to the market.

“However, structurally the market is much stronger than it has traditionally been.

“There is a very strong global demand for grains, in particular, the large amounts of grains going into biofuels. This is putting upward pressure on global farming costs, which in turn is pushing up global food prices, including dairy. Combine this with the weak US dollar, and we believe the long term outlook for dairy prices will be well above traditional averages,” Mr Ferrier said.

- ENDS -

© 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