Fonterra consumer business sale price jumps to $4.22b
The sale price of Fonterra’s global consumer and associated businesses to the world’s largest dairy company Lactalis has risen to $4.22 billion.
Fonterra has posted a $196 million loss for 2018, the first in the co-op’s 17-year history.
The 2018 annual results announced today make grim reading for farmer shareholders; normalised EBIT was $902 million, down 22%, gearing ratio was up from 44.3% last year to 48.4% and return on capital was 6.3%, down from 8.3%.
The co-op posted a profit of $745m last year.
Fonterra chief executive Miles Hurrell says the co-op’s business performance must improve.
“There’s no two ways about it, these results don’t meet the standards we need to live up to. In FY18, we did not meet the promises we made to farmers and unitholders,” says Hurrell.
“At our interim results, we expected our performance to be weighted to the second half of the year. We needed to deliver an outstanding third and fourth quarter, after an extremely strong second quarter for sales and earnings – but that didn’t happen.”
Hurrell says that in addition to the previously reported $232 million payment to Danone relating to the arbitration, and $439 million write down on Fonterra’s Beingmate investment, there were four main reasons for the cooperative’s poor earnings performance.
“First, forecasting is never easy but ours proved to be too optimistic.
“Second, butter prices didn’t come down as we anticipated, which impacted our sales volumes and margins.
“Third, the increase in the forecast Farmgate Milk Price late in the season, while good for farmers, put pressure on our margins. And fourth, operating expenses were up in some parts of the business and, while this was planned, it was also based on delivering higher earnings than we achieved.”
OPINION: Productive whole farmlands conversions into forestry are becoming a thorny issue for the Government.
Thus far in 2025, the Hawke's Bay rescue helicopter crew have completed over 220 missions, resulting in numerous positive patient outcomes.
The New Zealand Food Network's (NZFN) fifth birthday celebrations have been boosted by a whopping five tonne meat donation from meat processor ANZCO.
Pukekohe vegetable growers farewelled 101-year-old Alan Wilcox in late July, celebrating his many achievements and reflecting the widespread respect in which he was held.
A new nationwide survey shows New Zealanders expect farmers and food producers to play a leading role in cutting greenhouse gas emissions, but also gave them higher marks than most industries for their current efforts.
North Otago farmer Jane Smith is standing for the Ravensdown South Island director seat.
OPINION: Milking It reckons if you're National, looking at recent polls, the dream scenario is that the elusive economic recovery…
OPINION: Sydney has a $12 million milk disposal problem.