Wednesday, 27 November 2024 11:55

Editorial: Fonterra bounces back

Written by  Staff Reporters
At Fonterra’s annual general meeting this month, the board and management expressed confidence in its revised strategy and the potential to create further value for shareholders. At Fonterra’s annual general meeting this month, the board and management expressed confidence in its revised strategy and the potential to create further value for shareholders.

OPINION: What a difference a year can make.

Twelve months ago, Fonterra shares plummeted to $2 on the New Zealand Stock Exchange.

Compare that to seven years ago, when it was hovering around $6.50. Last week, shares were trading around $4.50. In the last financial year, Fonterra’s market capitalisation is up $4.3 billion to $7.7 billion.

The shift in share price reflects performance, and the returning confidence farmers have in Fonterra. And credit for this must go to Fonterra’s management team and staff.

It’s been a tough few years for the co-op’s farmer shareholders. Rising costs, interest rates and below par milk price have been taken a toll on dairy farming.

Thankfully, on-farm costs are easing and a potential $10 milk price on the cards this season means many farmers will be either breaking even or making a profit after a tough period. For these farmers, a rejuvenated co-op with a healthy share price puts the icing on the cake.

At Fonterra’s annual general meeting this month, the board and management expressed confidence in its revised strategy and the potential to create further value for shareholders.


Read More


The co-op has lifted its target average return on capital to 10-12%, up from 9-10%. There’s also a commitment to return more of the co-op’s earnings to shareholders, with an enhanced dividend policy of 60-80% of earnings, up from 40-60%. And the co-op is committed to maintaining the highest sustainable farmgate milk price.

With the co-op in a healthy state and the farmgate milk price heading towards $10, there’s renewed confidence among farmer shareholders. They can say Fonterra is in a strong position today and has a strong future.

More like this

Fonterra names Templeman-Jones to Mainland Group board amid divestment

As part of preparing for a potential IPO in relation to the divestment process for its global Consumer business and integrated businesses Fonterra Oceania and Sri Lanka, Fonterra has named Anne Templeman-Jones as chair-elect of the Audit and Risk Committee for the Mainland Group board.

Editorial: Making wool great again

OPINION: Otago farmer and NZ First MP Mark Patterson is humble about the role that he’s played in mandating government agencies to use wool wherever possible in new and refurbished buildings.

Milking longer with maize silage

This season's dry conditions have made one thing clear: not having enough feed on hand can bring your season to an early close.

Featured

Fonterra names Templeman-Jones to Mainland Group board amid divestment

As part of preparing for a potential IPO in relation to the divestment process for its global Consumer business and integrated businesses Fonterra Oceania and Sri Lanka, Fonterra has named Anne Templeman-Jones as chair-elect of the Audit and Risk Committee for the Mainland Group board.

National

Lame stories from a country vet

Everyone from experienced veterinarians and young professionals to the Wormwise programme and outstanding clinics have been recognised in this year’s…

Machinery & Products

Gongs for best field days site

Among the regular exhibitors at last month’s South Island Agricultural Field Days, the one that arguably takes the most intensive…

Amazone extends hoe range

With many European manufacturers releasing mechanical weeding systems to counter the backlash around the use and possible banning of agrochemicals,…

Gong for NH dealers

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

» Latest Print Issues Online

Milking It

No to pines

OPINION: Forests planted for carbon credits are permanently locking up NZ’s landscapes, and could land us with more carbon costs,…

Cut with care

OPINION: NZ farming is built on hard work, but also on innovation, a lot of which came about thanks to…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter