Tuesday, 15 November 2022 09:55

$1b capital return in doubt

Written by  Sudesh Kissun
At last week's annual meeting, Fonterra chair Peter McBride revealed that any amount of any capital return would be determined by the divestment of assets as well as the co-op's financial position. At last week's annual meeting, Fonterra chair Peter McBride revealed that any amount of any capital return would be determined by the divestment of assets as well as the co-op's financial position.

Fonterra is signalling to farmers that it may not meet its earlier pledge to return $1 billion to shareholders and unit holders within two years.

Speaking at Fonterra's annual meeting last week, chair Peter McBride revealed that any amount of any capital return will be determined by the successful divestment of assets, as well as the co-op's financial position at the time.

As part of its strategy to 2030, Fonterra set a goal of a return of about $1 billion to shareholders and unit holders from divestments, including Chilean business Soprole and a stake in the Australian business.

But after looking at options, Fonterra has decided to maintain full ownership of the Australian business.

Part of the 2030 strategy includes pumping $1 billion each into sustainability and moving milk into higher milk products.

McBride says the co-op is still committed to investment targets for sustainability, higher-value products and R&D.

However, he points out that return to shareholders and unit holders had anticipated divestments including Soprole and a stake in the Australian business.

"Even thoughwe have since decided not to sell a stake in our Australian business, we are still committed to targeting a significant capital return to our shareholders and unit holders.

"We need to be mindful that we retain the asset in Australia, and the earnings associated with it. The amount of any capital return will be determined by the successful completion of the divestment programme as well as the co-op's financial position at the time."

More like this

Featured

National

DairyNZ Farmers Forum underway

Over 300 farmers and rural professionals have gathered in Hamilton for the first DairyNZ Farmers Forum for this year.

Machinery & Products

Shearing legend hooked on CanAm

Sir David Fagan, world-renowned competitive sheep shearer with 642 shearing titles worldwide and a knighthood to his name, now runs…

50 years of tractor pull

This year, the Fieldays Tractor Pull, in association with PTS Logistics, mark a major milestone – 50 years of crowd-thrilling…

The Wrangler's birthday bash

It's the Wrangler Limited’s 30th birthday and to celebrate the milestone a prototype of the E Series Wrangler - a…

» Latest Print Issues Online

Milking It

Free speech

OPINION: The Free Speech Union is taking this one too far.

Drug survey

OPINION: New national data from The Drug Detection Agency (TDDA), a leading workplace drug tester, shows methamphetamine (meth) use is…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter