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

 

Fonterra Responds to Standard And Poor’s

14th October 2015
Fonterra Responds to Standard And Poor’s


Fonterra Co-operative Group Limited has been notified today that rating agency Standard and Poor’s has downgraded the Co-operative’s credit rating from A to A-.

Chief Financial Officer Lukas Paravicini said: “Our underlying financial strength and credit quality remain strong. This is recognised by Standard and Poor’s maintaining our rating in the ‘A’ category and reflects our fundamental strength and financial discipline.

“It is important to note that the revised rating will not have any impact on Fonterra’s strategy or on farmer shareholder payout.”

Mr Paravicini said the Co-operative’s current debt is at expected levels for this stage of the investment cycle.

“We carefully planned our investment strategy by first reducing our gearing over a number of years to enable us to make higher levels of investment in key strategic opportunities.

“These investments are making the Co-operative stronger and positioning us well for the future. We have built additional manufacturing capacity in our home base of New Zealand which is improving returns by giving more product options during the peak production period and our planned investments in China are building our presence in our number one strategic market,” Mr Paravicini said.

Fonterra is also continuing its strong financial discipline including capital investment management, setting a prudent advance rate payment to farmers for the current season, and applying its dividend policy to ensure an ongoing retention of a portion of earnings.

“In addition we are progressing well with our business transformation and this will further strengthen our financial position. Global dairy prices are also recovering which is a positive development, particularly for our farmer shareholders,” Mr Paravicini said.

Standard and Poor’s noted that its new methodology for agricultural co-operatives introduced in March does not always adequately capture the significant financial flexibility, and hence strength, of the Co-operative.

“Given this, we are disappointed that Standard and Poor’s has not reconfirmed its rating from April, especially when global dairy prices have significantly improved and we have continued our strong financial discipline,” Mr Paravicini said.


- ENDS -

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Energy Resources Aotearoa: New Law On Decommissioning Could Be Costly Overkill
A new law on decommissioning oil and gas fields passed by Parliament today has good intentions but is overkill, according to Energy Resources Aotearoa. "We strongly support operators taking responsibility and paying the costs for decommissioning, which is what all good operators do," says chief executive John Carnegie... More>>


Commerce Commission: News Publishers’ Association Seeks Authorisation To Engage In Collective Bargaining

News Publishers’ Association of New Zealand Incorporated seeks authorisation and provisional authorisation to engage in collective bargaining with Facebook and Google. The Commerce Commission has received applications from News Publishers’ Association of New Zealand Incorporated (NPA) seeking authorisation and provisional authorisation on behalf of itself... More>>


Reserve Bank: MPC Continues To Reduce Monetary Stimulus
The Monetary Policy Committee agreed to raise the Official Cash Rate (OCR) to 0.75 per cent. The Committee agreed it remains appropriate to continue reducing monetary stimulus so as to maintain price stability and support maximum sustainable employment... More>>

PriceSpy: Producer Prices Increase
New Black Friday and Covid-19 Report* released by PriceSpy says people’s fear of stepping inside physical shops during big sales events like Black Friday has risen since last year; Kiwis are still planning to shop, but more than ever will do it online this year... More>>

NZ Skeptics Society: Announce Their 2021 Awards, And Dr Simon Thornley Wins The Bent Spoon

Every year the New Zealand Skeptics presents its awards to people and organisations who have impressed us or dismayed us, and this year it’s been hard to pick our winners because there have been so many choices!.. More>>



REINZ: Sales Volumes Leveling Out

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 44 fewer lifestyle property sales (-2.6%) for the three months ended October 2021 than for the three months ended September 2021... More>>


BNZ: Auckland Retail Card Spending Bounces Back In Step Two
Bank of New Zealand (BNZ) card spending data released today shows one week of retail therapy at Alert Level 3 Step 2 has been enough to raise card spending in Auckland to levels greater than before the Delta lockdown... More>>