Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
This is despite the co-op shelving plans to offload part of its Australian business.
Fonterra chief executive Miles Hurrell says the co-operative remains committed to the capital return.
But he adds that things will depend on the co-op’s debt position and the how much the Soprole business in Chile will fetch.
As part of its strategy to 2030, Fonterra set a goal of a return of about $1 billion to shareholders and unitholders from divestments including Soprole and a stake in the Australian business.
But after looking at options, Fonterra has decided to maintain full ownership of the Australian business.
Australia plays an important role in our consumer strategy with a number of common and complementary brands and products and as a destination for our New Zealand milk solids,” says Hurrell.
“The business is going well, and it will play a key role in helping us get to our 2030 strategic targets.
“Even though we have decided not to sell a stake in our Australian business, we are still committed to targeting a significant capital return to our shareholders and unitholders.
“The amount of any capital return will ultimately be determined on a number of factors, including the successful completion of the divestment programme as well as our ongoing debt and earnings levels.”
