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Fonterra chief executive Miles Hurrell.
Federated Farmers vice president Andrew Hoggard says farmers will be pleased to hear a positive first quarter result from Fonterra.
But Hoggard says it’s still early days, and the proof of Fonterra’s turnaround will be if they get a dividend again at the end of this financial year.
Hoggard says farmer shareholders will be happy to see the co-op move in the right direction.
“I mean, they weren’t happy when our co-op was moving in the wrong direction,” he told Dairy News.
Fonterra announced a positive first quarter result, achieving a gross margin of $740 million, up from $646m last year.
Operating expenditure is down by $104m, and debt is reduced by $595m compared to same period last year.
Chief executive Miles Hurrell says the cooperative has made good progress moving to its new strategy and has had a strong first quarter.
“When we announced our strategy in September, we said there were three things most important to us: caring for people and making a positive impact on society (Healthy People), working together to achieve a healthy environment for farming and society (Healthy Environment) and delivering sustainable business results (Healthy Business). We are making good progress across all three areas.
“I’m pleased to see this level of improvement. Our people are doing a great job at putting our strategy into action. There’s more to do but the wheels are definitely in motion.”
While the forecast milk price to farmers is the fourth highest in Fonterra’s history, its putting pressure on profit margins in the value added business.
“The biggest pressure on our earnings is going to be the rising milk price. Stronger than forecast performance from our Foodservice business has helped offset the higher milk price to date and we will need to be focused on making improvements in other areas too.”
Fonterra’s earnings are also being affected by turmoil in some overseas markets Chile and Hong Kong.
“There will also be some markets that have difficult trading conditions over the course of the year. These currently include Chile and Hong Kong where we are starting to see the ongoing civil unrest impact our sales.”
Fonterra’s normalised earnings guidance for the 2020 financial year remains at 15-25 cents per share. This reflects the underlying performance of the business, Hurrell says.
Federated Farmers North Canterbury president Bex Green says two public meetings held this week should have made it loud and clear that rural families and businesses are concerned about proposed staffing changes at NZ Police.
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
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Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
Fresh produce grower and exporter T&G Global has overturned last year’s dismal performance by reporting a half year net profit of $1.7 million.
One of New Zealand’s largest fertiliser plants could be forced to shut down for four months as uncertainty looms over gas supply.
Federated Farmers North Canterbury president Bex Green says two public meetings held this week should have made it loud and clear that rural families and businesses are concerned about proposed staffing changes at NZ Police.
The Environmental Protection Authority (EPA) is consulting on a proposal to ban weedkillers containing chlorthal-dimethyl (DCPA).
August 6 marks Farm Worker Appreciation Day, a moment to recognise the dedication and hard mahi of dairy farm workers across Aotearoa - and DairyNZ is taking the opportunity to celebrate the skilled teams working on its two research farms.
OPINION: The Government has been seeking industry feedback on its proposed amendments to a range of Resource Management Act (RMA) national direction instruments.
