Fonterra Begins CEO Search Following Miles Hurrell Resignation
Fonterra chief executive Miles Hurrell has resigned after eight years in the role.
It has reported half-year normalised earnings before interest and tax (EBIT) of $665 million up 77% on the comparable period last year, and net profit after tax of $409 million up 123%.
Farmers will receive an interim dividend of 20c per share next month, easing some financial pain caused by the low payout. Last year Fonterra paid 10c as interim dividend.
The co-op has not changed its forecast payout, which remains at a milk price of $3.90/kgMS and earnings per share range of 45-55c.
Chairman John Wilson says that the supply and demand imbalance in the globally traded dairy market has brought prices down to unsustainable levels for farmers around the world, and particularly in New Zealand; the strong New Zealand dollar has also had a negative impact on the milk price.
"The low prices have placed a great deal of pressure on incomes, farm budgets, and our farming families," he says.
"Our priority is to generate more value out of every drop of our farmers' milk by focusing on the areas within our control. We aim to efficiently convert as much milk as possible into the highest-returning products.
"Our management is aware of the need for strong performance to ensure that we get every possible cent back into farmers' hands during a very tough year.
"We have lifted profitability from last season to this season, resulting in higher earnings per share to help offset low global dairy prices. As a result, we have delivered an interim dividend of 20 cents per share, up from an interim dividend for last year of 10 cents per share.
"Our forecast farmgate milk price of $3.90/kgMS reflects low global dairy prices, with whole milk powder decreasing around 17% cent this season to date. Forecast total available for payout of $4.35-$4.45/kgMS currently equates to a forecast cash payout of $4.30/kgMS after retentions for a fully shared up farmer."
