Paying an interim dividend of 20 cents per share, while maintaining the forecast Milk Price at $6 per kg/MS, will raise farmers’ confidence, Fonterra Shareholders’ Council chairman Duncan Coull says.
It will also enable farmers to alleviate cash-flow pressures which have built up over the past few seasons, he says
Interim results are encouraging and in line with the council and Fonterra farmers’ expectations, Coull says.
“It is encouraging that our farmers and local communities are now benefitting from global milk prices,” he says. The Fonterra business, despite the increased headwinds of a higher Milk Price, is performing very well and putting the co-op in a strong position, Coull adds.
Product movement from ingredients to consumer and foodservice has added considerable earnings to the balance sheet, he says. “Greater China is a particular highlight with a volume increase of 32% and normalised EBIT rising from $68 million to $96 million.”
Coull says despite this strong outlook there is a further six months before full numbers are realised.
“While our co-op is well-positioned, it is always best that Farmers err on the side of caution with regard to their financial planning.”
However, Coull says Fonterra looks forward to the current positive momentum continuing.
