|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Fonterra announces 2025/26 Farmgate Milk Price, continued strong FY25 earnings
|
|
Tuesday, 03 June, 2025, 08 : 00 AM [IST]
|
|
New Zealand
|
Fonterra co-operative group Ltd., provided its Q3 business update, announcing strong profit after tax of $1,158 million, up $119 million on this time last year. As a result of these strong earnings, the co-op narrowed its year-end earnings range to 65-75 cents per share, at the upper end of the guidance provided in March of 55-75 cents per share. At the same time, it announced an opening forecast Farmgate Milk Price for the 2025/26 season of $10.00 per kgMS, driven by stable near-term market demand.
Miles Hurrell, CEO, Fonterra, said, the company is committed to delivering strong shareholder returns through both earnings and the Farmgate Milk Price. He said, “We’ve delivered strong shareholder returns through FY25, including a 22-cent interim dividend, and as we get closer to the end of the year, we are focused on maintaining this momentum. Our forecast Farmgate Milk Price for the current season is driven by strong demand for our milk price reference products and our range is unchanged at $9.70-$10.30 with a midpoint of $10.00 per kgMS. We’re also pleased to tighten our year-end forecast earnings within the existing range, given the strength of our third quarter performance.”
“Looking at the season ahead, we expect this demand to continue for now, but we acknowledge the ongoing geopolitical uncertainty and the potential for a wider series of outcomes across the season. Therefore, our opening forecast Farmgate Milk Price for the 2025/26 season of $10.00 per kgMS sits within a wide forecast range of $8.00-$11.00 per kgMS. For the current season, the milk price of $10.00 per kgMS equates to around $15 billion into the New Zealand economy. The majority of this flows into regional New Zealand where it plays a strong role helping to sustain local communities,” said Hurrell.
The company’s focus on optimising its product mix has driven a Q3 normalised profit after tax of $1,158 million, equivalent to 70 cents per share, with operating profit of $1,740 million, up $267 million on last year.
“This result reflects the scale and ongoing strength of our Ingredients channel, and volume growth in our Foodservice and Consumer channels with each channel increasing its third quarter performance compared to the same period last year. Our rolling 12-months Return on Capital is 11%, which is above our previous target for FY25 and within our long-term target range of 10-12%,” said Hurrell.
“Our full year forecast earnings range of 65-75 cents per share assumes flat earnings in Q4 of FY25 due to the seasonality of our milk collections, the higher input prices for our Consumer and Foodservice businesses, ongoing investment in our ERP system and an increase in costs associated with shaping the Co-op post divestment to execute our strategy. We are heading into year end with a strong balance sheet and full year debt metrics on track to be below the co-op’s target range,” added Hurrell.
|
|
|
|
|
|
|
|
|
|