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

 

Fonterra expects FY loss of up to $675m

Fonterra says it won't pay a dividend this year; expects FY loss of up to $675m


By Rebecca Howard

Aug. 12 (BusinessDesk) - Fonterra Cooperative Group said it expects to report a full-year loss of $590 million to $675 million and that it won't pay a dividend as it slashes the carrying value of assets around the world.

Chair John Monaghan said in light of the significant write-downs "we have made the call to not pay a dividend for FY19," for the year ending July 31. While the underlying performance is in line with the latest earnings guidance, "we cannot ignore the reported loss," he said.

Fonterra reported its first net loss attributable to shareholders of $221 million in the July 2018 year, and paid annual dividends of 10 cents per share.

Chief executive Miles Hurrell said after a full review of the business over the past year, "it has become clear that Fonterra needs to reduce the carrying value of several of its assets and take account of other one-off accounting adjustments, which total approximately $820 million to $860 million."

He said while the FY19 underlying earnings are within current guidance of 10-15 cents per share. However, "when you take into consideration these likely write-downs, we expect to make a reported loss of $590-$675 million this year, which is a 37 to 42 cent loss per share."

Units of the Fonterra Shareholders' Fund and the farmer-owned Fonterra shares both closed at $3.76 on Friday, and have dropped 19 percent so far this year.

Regarding the specific write-downs, Hurrell said DPA Brazil will be impaired by approximately $200 million due to economic conditions in Brazil. The carrying value of the China Farms will be impaired by approximately $200 million due to the slower than expected operating performance.

In the New Zealand consumer business, the combined impact of operational challenges and a slower than planned recovery in market share means a write-down of approximately $200 million. In Australia, a one-off impact of approximately $70 million includes the previously announced $50 million on the soon-to-be shuttered Dennington factory.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Super Fund/Canada Bid v NZTA: Tow Preferred Bidders For Auckland Light Rail

The two preferred delivery partners for Auckland light rail have been chosen and a final decision on who will build this transformational infrastructure will be made early next year, Minister of Transport Phil Twyford announced. More>>

ALSO:

9.3 Percent: Gender Pay Gap Unchanged Since 2017

“While it has remained flat since 2017, the gender pay gap has been trending down since the series began in 1998, when it was 16.2 percent,” labour market statistics manager Scott Ussher said. More>>

ALSO:

Ex-KPEX: Stuff Pulls Pin On Media Companies' Joint Ad-Buying Business

A four-way automated advertising collaboration between the country's largest media companies is being wound up after one of the four - Australian-owned Stuff - pulled the pin on its involvement as part of a strategic review of its operations ... More>>

Bus-iness: Transdev To Acquire More Auckland And Wellington Operations

Transdev Australasia today announced that it has agreed terms to acquire two bus operations in Auckland and Wellington, reaching agreement with Souter Investments to purchase Howick and Eastern Buses and Mana Coach Services. More>>

ALSO: