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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO: