Hurrell Resignation: No Bonus or Golden Handshake for Fonterra CEO
Fonterra is rejecting New Zealand First's claim that outgoing chief executive Miles Hurrell is in line for a 'golden handshake'.
The co-operative announced an interim dividend of 24 cents per share and confirmed a special dividend of 16 cents per share following the sale of Mainland Group to Lactalis.
The co-operative has also lifted its forecast Farmgate Milk Price midpoint for the season from $9.50/kgMS to $9.70/kgMS, with the range changing from $9.20 - $9.80/kgMS to $9.40 - $10.00/kgMS.
The full year earnings guidance for continuing operations from 45-65 cents per share to 50-65 cents per share.
Miles Hurrell, chief executive of Fonterra, says these changes to the forecast Farmgate Milk Price and earnings reflect improvement in global commodity prices and the Co-op’s strong underlying margins and cost control, but notes that significant volatility remains, particularly as the conflict in the Middle East continues.
“The underlying performance of Fonterra’s continuing business is stable, allowing the Co-op to return all earnings associated with the Mainland Group business and lift our forecasts for the remainder of the year ahead," says Hurrell. "Demand for our products is strong, and we’re focused on our plan to maximise both the Farmgate Milk Price and earnings."
The record date for the two dividend payments will be 30 March, and the payment date will be 14 April. This is also the date Fonterra is targeting for payment of the $2.00 per share capital return from the Mainland Group divestment, based on the transaction completing at the end of March.
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Total Group reported operating profit increased to $1,231 million from $1,107 million the year prior.
Reported profit after tax is $750 million, equivalent to earnings per share of 45 cents and up on 44 cents last year. When excluding the costs associated with the Consumer divestment, Fonterra’s normalised earnings per share is 51 cents.
The Co-op delivered a Return on Capital of 11.2%, up on this time last year and in line with the target range of 10-12%.
“The first half of the year has been shaped by strong milk flows, with the Co-op collecting record milk volumes in the South Island so far this season. When combined with several adverse weather events, these conditions have put pressure on the operations of all New Zealand milk processors.
"We have been able to navigate through these challenges due to the resilience of our network," says Hurrell.
"Our performance shows that we are growing the high-value parts of our business through optimal allocation of milk solids across our product mix, which is driving a strong return on capital for shareholders and unit holders."
Fonterra’s market performance has been strong, with the Ingredients business delivering a return on capital of 11% and Foodservice a return on capital of 12.6%.
These results have been driven by our protein portfolio in the Ingredients channel and improved pricing in Foodservice to successfully recover the lift in butter and cream input costs seen last year.
Mainland Group performance improved during the first half of this year, primarily due to a favourable commodity price cycle.
Over the course of FY26, Fonterra has made significant progress on the divestment of its global consumer and associated businesses, Mainland Group, to Lactalis for $4.22 billion. The transaction is unconditional and expected to complete at the end of March 2026.
“Our focus now is firmly on our strategy to grow value for farmers as a global B2B dairy nutrition provider, working closely with customers through our high-performing Ingredients and Foodservice channels.
“The foundation of our Co-op is our New Zealand milk supply. Fonterra has made it easier for new farmer suppliers to join the Co-op and share up over time through changes to our shareholding requirements, with greater flexibility in the level of investment required.
“We are focused on maximising value from farmers’ milk and are building new manufacturing capacity across several New Zealand sites to help meet growing demand for our high-value proteins, butters and creams,” says Hurrell.
Projects underway include:
- Studholme - construction of the new advanced protein hub is now complete, with first trial products off the line in February 2026.
- Clandeboye - commenced build of our butter plant expansion in January 2026, with product expected off the line in April 2027.
- Edendale – construction underway of new UHT cream plant and remains on track for first products to come off the line in late 2026.
- Edgecumbe – today announcing a $35 million investment in expanding our pastry butter sheet line, to support continued demand through Foodservice for butter products. Site works began in March 2026, with product off the line expected in April 2027.
