Divestment means Fonterra can focus on its strengths
OPINION: Fonterra's board has certainly presented us, as shareholders, with a major issue to consider.
Fonterra farmers have received several pieces of good news this morning.
The co-op has lifted its 2024/25 forecast Farmgate Milk Price midpoint to $9/kgMS and unveiled a FY25 earnings guidance of 40-60 cents per share.
It has also announced a total dividend of 55c/share for the 2024 financial year.
Chief executive Miles Hurrell says the lift in this season’s forecast milk price follows further recent strengthening in Global Dairy Trade prices and constrained milk supply in key producing regions.
“I’m pleased to be announcing an increase in this season’s forecast Farmgate Milk Price, which I’m sure will be welcome news for farmers, particularly when combined with the 55 cent total dividend for FY24 also announced by the co-op today,” says Hurrell.
Fonterra’s new forecast Farmgate Milk Price range for the 2024/25 season is $8.25-$9.75/kgMS, with the co-op continuing to maintain the wide range due to the relatively early stage of the season.
“We’ve also announced today our forecast earnings for FY25 of 40-60 cents per share,” says Hurrell.
“The forecast earnings range reflects an expectation we will maintain strong margins in all three of our sales channels, while also investing in the Co-op’s IT & digital transformation and incurring higher tax expenses,” he says.
Fonterra also announced that, after several years of strong earnings performance, the co-op exhausted its tax losses in FY24 and will now be paying tax.
Chief Financial Officer Andrew Murray says that “as a result of this change, when we declare a dividend from FY25 and beyond, imputation credits will now be available to be attached to our dividend.
“To enable all shareholders to receive the imputation credits, we are changing how we treat supply backed shares for tax purposes which means that more tax will be paid by Fonterra.
“While this does not impact the operating performance of Fonterra, it will reduce our reported earnings per share in future years, as Fonterra will have paid the tax on the cash to be distributed,” says Murray.
Meat co-operative, Alliance has met with a group of farmer shareholders, who oppose the sale of a controlling stake in the co-op to Irish company Dawn Meats.
Rollovers of quad bikes or ATVs towing calf milk trailers have typically prompted a Safety Alert from Safer Farms, the industry-led organisation dedicated to fostering a safer farming culture across New Zealand.
The Government has announced it has invested $8 million in lower methane dairy genetics research.
A group of Kiwi farmers are urging Alliance farmer-shareholders to vote against a deal that would see the red meat co-operative sell approximately $270 million in shares to Ireland's Dawn Meats.
In a few hundred words it's impossible to adequately describe the outstanding contribution that James Brendan Bolger made to New Zealand since he first entered politics in 1972.
Dawn Meats is set to increase its proposed investment in Alliance Group by up to $25 million following stronger than forecast year-end results by Alliance.
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