Thursday, 07 December 2017 12:33

Fonterra revenue up, sales down

Written by 
Theo Spierings. Theo Spierings.

While Fonterra’s first quarter revenue is up 4% on the same period last year, sales volumes are down 20% to 3.9 billion liquid milk equivalent (LME).

Gross margin of 16.7% is also down on last year, says chief executive Theo Spierings.

He says the first quarter financial results were generally as expected as the co-op started the year with record low inventory followed by the second year of low spring milk collections from NZ due to wet weather.

“This has challenged our ingredients business where we had lower volumes to sell. As a result, sales were down 19% to 3.6b LMEs compared to the same time last year.

“The gross margin in ingredients was in line with the second half of last year. However, when we compare it to the same period last year it was down from 12.1% to 8.1%, mainly due to the rise in commodity prices,” says Spierings.

“Our consumer and foodservice business continued with strong sales volumes in our key markets across Greater China and Asia with overall just a 3% decline to 1.3b LMEs in total volume compared to the record levels at the same time last year.

“Gross margin in consumer and foodservice was 24%. While this is down on the 31% in the first quarter of 2017 when input costs were lower, it is up on the gross margin percentage in the last quarter of 2017. This positive trend shows we can create more value in our consumer and foodservice business despite higher input costs and it reflects the strength of our strategy of moving more volume into higher value.”

Spierings says the co-op expected performance to be weighted to the second half of the year and remains confident in its full year forecasts following revisions after the recent Danone news. 

“We are focused on continued tight operational and financial discipline and a keen eye on our customers’ needs to maximise sales opportunities.”

More like this

Winston's crusade

OPINION: A short-term sugar hit. That's what NZ First leader Winston Peters is calling the proposed sale of Fonterra's consumer and associated businesses.

Featured

Carrfields invests in new Ashburton R&D hub

The Ashburton-based Carrfields Group continues to show commitment to future growth and in the agricultural sector with its latest investment, the recently acquired 'Spring Farm' adjacent to State Highway 1, Winslow, just south of Ashburton.

Elite sheep dogs to go head-to-head at Ashburton A&P Show

A major feature of the Ashburton A&P Show, to be held on October 31 and November 1, will be the annual trans-Tasman Sheep Dog Trial test match, with the best heading dogs from both sides of the Tasman going head-to-head in two teams of four.

National

Machinery & Products

Krone EasyCut B1250 fold

In 2024, German manufacturer Krone introduced the F400 Fold, a 4m wide disc front mower, featuring end modules that hinge…

» Latest Print Issues Online

Milking It

Microplastics problem

OPINION: Microplastics are turning up just about everywhere in the global food supply, including in fish, cups of tea, and…

Job cuts

OPINION: At a time when dairy prices are at record highs, no one was expecting the world's second largest dairy…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter