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


Fonterra Lifts Payout Forecast To $4.15

For Immediate Release
9 December 2003


Improved commodity prices, lower costs and a positive position on forward sales have enabled Fonterra Co-operative Group to lift its payout forecast by 20 cents to $4.15 for the current season.

Announcing the higher forecast today, Fonterra Chairman Henry van der Heyden said the increase, which is the second in four months, reflects a solid performance by the co-operative in the current season.

"We are benefiting from firmer commodity prices in international markets and good demand for our products. In addition, we are in the relatively strong position of having a significant percentage of our forecast production contracted."

Mr van der Heyden said Fonterra had also continued to drive costs out of the business and reduce demand for working capital while reducing debt. The co-operative's interest bearing debt has been reduced substantially since the start of the financial year in June.

"Our debt level per kilogram/milksolids is at its lowest level since the merger." Mr van der Heyden said there had been a real determination across Fonterra to beat the forecast payout of $3.95 per Kg/MS made at the co-operative's annual meeting in September.

Fonterra's foreign exchange policy means the continued rise of the New Zealand dollar will not impact on payout this season, but it will the next.

The policy, which is designed to give farmers more certainty around earnings in the current season, delays the impact of currency gains by a year, as Fonterra converts earnings in the current season at the average exchange rate prevailing in the season before.

"This year's average conversion rate is around US52 cents, which helps us to maintain our confidence in our forecast payout for this season. However, the continued strengthening in the New Zealand dollar means our average conversion rate next season will certainly be higher," said Mr van der Heyden. "This will have an unavoidable impact on payout for 2004/05, and is why we have continued to reinforce to farmers since September the need for caution for next season."

Mr van der Heyden said the Board would be in a position to give a preliminary indication of the 2004/05 forecast payout by March.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Government: Delivering Lower Card Fees To Business

Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses ... More>>

SEEK NZ Employment Report: April 2021

OVERVIEW OF APRIL 2021: STATE OF THE NATION: April, for the second consecutive month, saw the highest number of jobs ever advertised on Applications per job ad fell 9% month-on-month (m/m). SEEK job ads were up by 12% m/m. SEEK job ads were ... More>>

Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

Stats: Lower Job Security Linked To Lower Life Satisfaction

People who feel their employment is insecure are more likely than other employed people to rate their overall life satisfaction poorly, Stats NZ said today. New survey data from the March 2021 quarter shows that 26 percent of employed people who thought ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>