Tuesday, 28 May 2019 09:55

Fonterra revenue up, EBit down

Written by 
Fonterra says it’s NZ ingredients business is performing well. Fonterra says it’s NZ ingredients business is performing well.

Fonterra's revenue for the nine months of this financial year touched $15 billion, up 1% on the same period last year.

Sales volumes were 16.6b liquid milk equivalent (LME), up 4%. However, normalised EBIT was down 9% to $522 million. 

In ingredients, sales volumes for the first nine months were up 10% to 16.3b LME, gross margin was down to 8.6% from 9.6% and EBIT was down $64m to $602m. 

In consumer and foodservice sales, volumes were down 1% to 3.8b LME, gross margin was down to 22.8% from 23.6% and normalised EBIT was down $62m to $266m.

Chief executive Miles Hurrell says the New Zealand ingredients business is performing as expected but Australia ingredients continues to face challenges and it is taking longer than planned to lift performance in some parts of the co-op’s consumer and foodservice business.

“Due to the challenges in Australia ingredients and tightening relative price differences between reference products, or those products that inform the farmgate milk price, and non-reference products – that’s all our other products -- we are reducing the forecast full year normalised EBIT for the whole ingredients business to $645 - $725m, down from the $750 - $850m range we shared at our interim results.”

Consumer and foodservice improved its performance in the third quarter relative to the first half. 

“Due to our performance in Latin America we have lowered our forecast normalised EBIT from $475m - $525m to $400m - $430m for this part of the co-op,” he says.

The China foodservice business recovered as demand for butter bounced back, helping pricing and in market inventory return to more normal levels. 

There was good demand for Anchor Food Professionals UHT culinary cream and the Waitoa UHT factory had worked hard to get shipments to China foodservice customers.

The co-op’s Oceania consumer and foodservice business continued to perform well with Australia’s spreads category, including Western Star butter, contributing significantly to gross margin.

More like this

Fonterra sticking to $10/kgMS milk price

Fonterra has reaffirmed a forecast milk price mid-point of $10/kgMS for its farmer shareholders, with just over two months of the 2024-25 season left to run.

Featured

Pāmu farm opens gate to urban visitors

For many urban New Zealanders, stepping into Pāmu’s Pinta dairy farm near Taupo last month was the first time they had had the chance to experience farm life up close.

National

Machinery & Products

Gong for NH dealers

New Holland dealers from around Australia and New Zealand came together last month for the Dealer of the Year Awards,…

A true Kiwi ingenuity

The King Cobra raingun continues to have a huge following in the New Zealand market and is also exported to…

Data crucial to managing water

Watermetrics was formed as a water data collector and currently supplies and services modern technology such as flow meters, soil…

» Latest Print Issues Online

Milking It

Dairy power

OPINION: The good times felt across the dairy sector weren't lost at last week's Beef + Lamb NZ annual meeting.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter