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Fonterra's latest profit results September 2017

Tuesday, 26 September 2017 at 2:34pm

Featured in today's newspaper was an article by Gerard Hutching.  Hutching gives a run down on Fonterra's latest result which saw an after-tax profit of $745 million, down 11 per cent on 2016.  Fonterra's final payout to farmers for the 2016-17 season was $6.12 per kilogram of milksolids, plus a dividend of 40c per share for a total of $6.52.  Revenue was up 12 per cent to $19.2 billion, but earnings before tax and interest (EBIT) was $1.155b, down 15 per cent.

Craigs Investment Partners research analyst Adrian Allbon said it was in line with his expectation, and ASB analyst Nathan Penny said farmer shareholders would be largely happy with the result, saying the current season would provide a better test of Fonterra's financial performance, because it expected to post similar profits over the season compared to the season just gone.

Chairman John Wilson said the co-operative had made significant  progress in the value-add side of the business.
"Despite lower milk volumes due to poor weather in parts of the season, the business delivered a good result by prioritising higher value advanced ingredients and growing our sales of these in-demand and specialised products by 473 million litres this year."

Chief executive Theo Spierings said Fonterra had prioritised higher margin products and tapped into the expertise of staff to come up with innovative ways to generate higher returns.  It had commissioned or announced new investments including new UHT lines at Waitoa, butter and cream cheese expansions at Te Rapa, construction of the its largest mozzarella plant at Clandeboye, two new cream cheese plants at Darfield, and the reopening of its cheese and whey plants at Stanhope in Australia.


Read the full article here - Fonterra's profit falls, revenue rises and farmers' returns lift