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

 

Fonterra Announces Forecast Cash Payout for 2013/14 Season

31 July 2013

Fonterra Announces Forecast Cash Payout for 2013/14 Season

Fonterra Co-operative Group Limited today lifted its Forecast Farmgate Milk Price for the FY14 season by 50 cents to $7.50 per kgMS and announced an estimated dividend of 32 cents per share - amounting to a Forecast Cash Payout of $7.82.

Chairman John Wilson said the higher Forecast Farmgate Milk Price for the new season reflected continuing strong international prices for dairy.

“At the beginning of this season, our forecast was that dairy commodity prices would continue at or near current levels until the fourth quarter of 2013. However, supply constraints in Europe and China during the Northern Hemisphere spring have contributed to an increase in dairy prices of 3 per cent over the past two months. In addition, the NZ dollar has weakened against the US dollar. These factors have contributed to our updated forecast,” said Mr Wilson.

The Co-operative has also confirmed a further increase to the Advance Rate schedule, starting from $5.50 per kgMS.

“A higher Advance Rate provides our farmer shareholders a strong start to the season and the opportunity to grow their own farming businesses.”

Commenting on the forecast dividend for FY14, Mr Wilson said Fonterra’s Board has amended the Co-operative’s dividend policy.

“The Board has approved a new policy that aims to deliver a sustainable dividend from FY14 onwards. When setting the dividend, the Board will take into account short and medium term earnings to deliver a dividend per share of between 65–75 per cent of adjusted Net Profit after Tax over a period of time. The dividend remains at the Board’s discretion, and subject to market conditions and Fonterra’s financial position.

“Additionally, from FY14 we are adopting a qualitative earnings guidance approach, rather than the previous quantitative earnings per share guidance.

“The changes mean we will provide more market commentary – but will no longer put numbers around future earnings per share. This new policy will enable the business to provide a longer term view on any potential volatility in earnings,” said Mr Wilson.

Chief Executive Theo Spierings said international dairy trade growth is currently being led by strong demand for powders (combined whole milk and skim).

“This trend, relative to prices for cheese and casein, currently would have a short term negative influence on product mix returns during the first half of FY14.

“As we drive for growth in our consumer businesses, during the first half of FY14 we are likely to have to absorb some of the expected substantial increases in the cost of goods arising from current high commodity prices, and this could have an impact on margins.

“Taking into account the headwinds we face and current market volatility, the FY14 estimated dividend of 32 cents per share may be outside the 65-75 per cent range.

“We will provide an update on business performance when we announce our Annual Result on 25 September 2013,” said Mr Spierings.

About Fonterra
Fonterra is a global leader in dairy nutrition – the preferred supplier of dairy ingredients to many of the world’s leading food companies. Fonterra is also a market leader with our own consumer dairy brands in Australia/New Zealand, Asia/Africa, Middle East and Latin America.

The farmer-owned New Zealand co-operative is the largest processor of milk in the world, producing more than two million tonnes of dairy ingredients, value added dairy ingredients, specialty ingredients and consumer products every year. Drawing on generations of dairy expertise, Fonterra is one of the largest investors in dairy based research and innovation in the world. Our more than 16,000 staff work across the dairy spectrum from advising farmers on sustainable farming and milk production, to ensuring we live up to exacting quality standards and delivering every day on our customer promise in more than 100 markets around the world.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


NIWA: Tonga Eruption Discoveries Defy Expectations
New findings from the record-breaking Tongan volcanic eruption are “surprising and unexpected”, say scientists from New Zealand’s National Institute for Water and Atmospheric Research (NIWA)... More>>


Commerce Commission: Appeals Record $2.25m Fine In Vodafone FibreX Case

The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ Limited (Vodafone) for its offending under the Fair Trading Act during its FibreX advertising campaign. While the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, the Commission will argue that it is manifestly inadequate... More>>



All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>




Finder: RBNZ Survey: 64% Of Experts Say Rising Inflation Will Push More Kiwis Into Debt

Soaring inflation and cost of living pressures will see many households pushed to the financial limit, according to experts... More>>



Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>


DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>