fbpx
Print this page
Tuesday, 30 May 2017 08:55

Fonterra revenues rise

Written by  Pam Tipa
Theo Spierings. Theo Spierings.

Fonterra's revenue of $13.9 billion for the first nine months of 2016-17 is up 8% on the same period last year as a result of higher milk prices.

“Our volume to value strategy continues to drive our performance in the ingredients and consumer and foodservice businesses,” chief executive officer Theo Spierings says.

“Margins in most of our businesses are similar to last year, and we have moved an additional 350 million liquid milk equivalent (LME) into higher value products in the year to date. Consumer and foodservice volumes in Greater China in particular have grown by 40% in the period.

“We are on track to exceed our target of moving an additional 400 million LME into higher value products by year-end,” he says.

“Better than expected autumn weather has resulted in more milk at the end of the season which, combined with higher milk prices, is good news for the cooperative.”

Previously signalled challenges, including product stream returns and pressure on margins, have had a greater impact than expected in the third quarter.

“The closing of the relative price gap between reference milk price products and non-reference products has reduced overall profitability in our ingredients business,” Spierings says.

“We have continued to manage our costs tightly, with operating expenses for the nine months down 4%.

“Efficiencies and improvements in working capital are ongoing, and capital expenditure is in line with expectations and expected to reduce in the 2017-18 year. Our gearing is forecast to be in the target range of 40-45% at year’s end.

All these factors contribute to the continuing strength of the cooperative’s balance sheet,” Spierings says.

Chairman John Wilson says the cooperative is well placed to deliver through the rest of the year for its farmers.

“While there is work to be done in the final quarter, the outlook for earnings remains achievable, and we are committed to delivering the best outcome for our farmer shareholders and unitholders.”

More like this

China keeps dairy prices high

Whole milk powder (WMP) prices are now sitting above pre-Covid-19 levels and New Zealand farmers can thank a resurging Chinese economy for that.

China back on track?

Life in China is starting to get back to some semblance of normality, according to MPI’s deputy director general of China Relations.

A ticking time bomb

Our dairy industry risks being exposed to a ‘ticking time bomb’ of unethical players unlawfully passing off New Zealand-made and packed milk powder products in China as supplements for babies.

MPI says it will act

MPI says it takes the claims made by Jane Li seriously and where it has evidence that exporters are not meeting their requirements, it will take action.

Featured

 

Limited feed puts ewes at risk

Severe feed shortages in parts of the country mean many ewes are on a nutritional knife-edge heading into lambing and could be at risk of developing metabolic disorders.

Jack’s unique solution

Jason Jack was left with severe spinal injuries after a wakeboarding accident when he was 29, but that hasn’t stopped him getting out and about in difficult environments.

National

$10 payout!

A small but select group of Fonterra farmers are on the cusp of setting a new milk payout record.

The migrant workers dilemma

Dairy farmers want more Kiwi workers, but they also want relaxed immigration restrictions. So, what's the problem?

Producing milk, the Miraka way

The goal of Māori-owned dairy company Miraka, near Taupo, is to become the most sustainable dairy company in the world.

Machinery & Products

Landpower invests in cow central

One of Australasia’s largest, privately-owned farm machinery distributors, Landpower is building a new $10 million complex adjacent to Hamilton Airport.

Maize moisture in a moment

With forage maize playing such an important part of the New Zealand fodder supply chain, a useful hand-held moisture measuring…