Fonterra lifts profit forecast on improved quarterly results

Strong performance in food service, consumer channels drive profits
calendar icon 30 May 2024
clock icon 1 minute read

New Zealand's Fonterra Co-operative Group raised its full-year earnings forecast on Wednesday due to strong performance in its food service and consumer channels in the third quarter, reported Reuters

The dairy cooperative lifted its fiscal 2024 continuing operations' earnings forecast range to 60-70 NZ cents per share from 50-65 NZ cents.

Fonterra said it expects to pay NZ$7.25 ($4.45) to NZ$8.75 per kilogram of milk solids (kgMS) for the financial year 2024-25, the midpoint of which is only slightly higher than the current season's NZ$7.80 per kgMS.

"Looking to the 2024/25 season, milk supply and demand dynamics remain finely balanced and China import volumes have not yet recovered to historic levels," Chief Executive Officer Miles Hurrell said.

"Given the early point in the season, the uncertainty in the outlook and ongoing risk of volatility in global markets, we are starting the season with a cautious approach," he added.

The company also posted a 2% rise in its third-quarter normalised profit to NZ$1.01 billion, but flagged that operating expenses are up across the business due to inflation, upfront costs of driving efficiency improvements and increased IT spend.

Additionally, Fonterra said it had received interest from multiple parties regarding the potential sale of its consumer and associated businesses announced earlier this month.

($1 = 1.6289 New Zealand dollars)

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