Fonterra is lifting its forecast FY24 earnings guidance and farmgate milk price range after a strong first quarter.
The forecast farmgate milk price midpoint for the 2023/24 season is up 25 cents to $7.50 per kilogram of milk solids.
The forecast range moved from $6.50-$8.00 per kgMS to $7.00-$8.00 per kgMS.
Chief executive Miles Hurrell says it reflects strengthening demand for commodity products from key importing regions, including improvement in demand from China during the first quarter.
“Global Dairy Trade prices have lifted, and our sales book is also well contracted for this time of year, giving us confidence to increase our forecast farmgate milk price.
“It’s still early in the year, with potential for further volatility in commodity prices, so we will continue to watch market dynamics closely and provide updates as needed,” Hurrell says.
The co-op also reported strong earnings for the first quarter due to improved performance in all three of its sales channels.
As a result, it has lifted the midpoint of its forecast earnings for the year up five cents per share, with the range moving from 45-60 cents per share to 50-65 cents per share.
Fonterra’s profit after tax is up 85% on this time last year to $392m, equivalent to 24 cents per share. EBIT is up 63% to $575m.
In September, Fonterra reported a profit after tax of $1.6 billion for its full-year result, up 170% on the previous year.
