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


Fonterra affirms forecast payout, issues bonus shares

Fonterra holds forecast payout for current season; will issue bonus shares, units

By Paul McBeth

Feb. 27 (BusinessDesk) - Fonterra Cooperative Group, the world's biggest dairy exporter, has held its forecast farmgate payment on expectations of higher global prices in the second half of the season, and wants to grow its winter milk supply, meaning a tinkering with the capital structure.

Farmers are still expected to be paid $5.50 per kilogram of milk solids, with forecast earnings per share unchanged at between 40 cents and 50 cents, the Auckland-based cooperative said in a statement. That's based on the dollar holding at current levels for the rest of the season, and a stronger currency may impact the forecast, it said.

We had a strong start to the season and milk collection volumes were running 6 percent ahead of last season on a year-to-date basis," chief executive Theo Spierings said. "However, the dry conditions mean we are currently forecasting total milk collection volumes to finish approximately 1 percent ahead of the full season."

Separately, Fonterra said it plans to issue one share or unit in the Shareholders' Fund for every 40 held on April 12 at no cost to match any increase in production next season. The cooperative intends to introduce a dividend reinvestment plan in October, and plans to conduct another supply offer for farmer shareholders to sell their dividend rights into the fund last this year.

The dairy exporter has modified its growth contracts to give more time and options for growing farmers to buy shares which meet their production.

The issue will increase the share base by 2.5 percent, and while diluting dividends per share or unit, won't impact on the total return to farmers and investors, Fonterra said.

"With a stable capital base, we now have certainty and can offer farmers more ways to grow milk supply and given them more time to share up," chairman John Wilson said.

Fonterra Shareholder Fund units are 31 percent above their offer price at $7.27 and shares in the cooperative last traded at $7.20.

The company also announced it will spend more than $100 million on a new UHT processing plant at its Waitoa plant in the Waikato as it aims to double UHT production over the next few years.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade & Retail: Chinese Disaster Spells Quiet Season For NZ Fireworks Sales

In August, two massive explosions at a warehouse at the port in the port of Tianjin, Northern China, killing more than a hundred people and devastating large areas of the city. In the wake of the disaster, Chinese authorities rushed to regulate the distribution of all dangerous goods... More>>



Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news