Expert Says Fonterra Backing Current Strategy With New CEO Appointment
The appointment of Richard Allen as Fonterra's new chief executive signals execution, not strategy, according to agribusiness expert Dr Nic Lees.
And the co-op is signalling more “one-off” transactions this year as it grapples to strengthen its balance sheet following two straight years of net losses.
The DFE Pharma sale, first announced in September 2019, has completed regulatory approvals from competition authorities.
Fonterra chief financial officer Marc Rivers says the completion of this sale is a key milestone in strengthening the co-op’s balance sheet, with cash proceeds of $554 million, comprising of the original sale proceeds of $537 million plus $17 million in settlement adjustments.
Over the course of the 2020 financial year Fonterra expects there to be other one-off transactions as it implements strategy and continues its asset portfolio review, he adds.
Rivers says it’s too early to comment on the impact of asset sales on the 2020 financial year.
“The announced forecast earnings range will continue to reflect just the underlying performance of the business.
“We will provide details of the overall impact of all one-offs as part of our full-year financial statements and will also provide an update as part of our Interim Results,” Rivers says.
DFE Pharma was a joint venture established in 2006 between Fonterra and Dutch-based FrieslandCampina. DFE Pharma is one of the largest suppliers of pharmaceutical bulking agents in medicines such as tablets and powder inhalers.
DFE Pharma has production locations in Europe, India and New Zealand (Kapuni).
