Source: Radio New Zealand
RNZ / Cole Eastham-Farrelly
Dairy giant Fonterra has increased its first quarter profits to $278 million, $15m more than a year ago.
Key numbers for the quarter ended 31st October:
- Net profit $278m up $15m
- Forecast FY earnings unchanged at 45-65cps
- Midpoint milk price forecast $9.50 per kgMS
- Lactalis gains OIS approval to buy Mainland
Chief executive Miles Hurrell said earnings were in line with last year on the back of higher commodity prices, and first quarter profits were the equivalent of 17 cents per share.
“When excluding the costs associated with the Consumer divestment, Fonterra’s normalised earnings per share are 18 cents, up slightly on last year.”
“We maintain our full year earnings range for continuing operations of 45-65 cents per share,” Hurrell said.
Fonterra said it is making good progress implementing its strategy to become a global B2B (business to business) dairy provider after it completes the sale of its consumer Mainland Group.
“We are firmly focused on delivering the commitments we’ve made, not least our target to lift earnings back to FY25 levels by FY28, offsetting the impact of the divestment of Mainland Group,” Hurrell said.
Fonterra intended to invest $1 billion over the next three to four years in projects to generate operational efficiencies.
Mainland sale and capital return
Fonterra said the sale of its consumer brands remained on track and the French based buyer, Lactalis, had secured approvals from the Overseas Investment Office.
Separately, Fonterra said it was continuing to work through other regulatory approvals.
The co-operative expects the sale to close in the first half of 2026 after its farmer shareholders vote on the capital return in February.
Shareholders are set to receive $2 per share tax free from the sale, equivalent to $3.2b.
Last week Fonterra lowered its forecast farmgate milk price to between to between $9.00 and $10.00 a kilo of milk solids as increasing global milk production sent prices lower.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
