Latest news with #Fonterra
Scoop
3 days ago
- Business
- Scoop
Fonterra Announces 2025/26 Farmgate Milk Price, Continued Strong FY25 Earnings
Press Release – Fonterra CEO Miles Hurrell says Fonterra is committed to delivering strong shareholder returns through both earnings and the Farmgate Milk Price. . Normalised* profit after tax: NZ $1,158 million, up 11% · Normalised continuing earnings per share: 70 cents per share, up 13% · Return on capital: 11% down from 11.9% · FY25 full year forecast earnings range: 65-75 cents per share · 2024/25 season forecast Farmgate Milk Price: $10.00 per kgMS · 2025/26 season opening forecast Farmgate Milk Price: $10.00 per kgMS Fonterra Co-operative Group Ltd today 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, Fonterra announced an opening forecast Farmgate Milk Price for the 2025/26 season of $10.00 per kgMS, driven by stable near-term market demand. CEO Miles Hurrell says Fonterra is committed to delivering strong shareholder returns through both earnings and the Farmgate Milk Price. '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,' says Mr Hurrell. 2025/26 season opening Farmgate Milk Price '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. Business performance Fonterra'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%,' says Mr 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,' says Mr Hurrell. Strategic delivery Miles Hurrell says a priority for Fonterra this year has been the implementation of its strategy, which deepens the Co-op's focus on its high-performing Ingredients and Foodservice businesses. 'Last year, we announced a step-change in our strategic direction, including a decision to divest our global Consumer and associated businesses. 'This step was grounded in an understanding of how we best create value for farmer shareholders and ultimately for New Zealand. 'We have been thoroughly testing the terms and value of both a trade sale and initial public offering (IPO) as divestment options. This work is on track as planned and we will seek farmer shareholder approval to divest through a vote in due course. 'Given the confidence we have in our strategy, we have strong conviction that a divestment is the right choice for the Co-op and its owners. 'Our financial results show we have an impressive business as a global B2B dairy player, powered by our home-base of New Zealand milk and operations. 'If we divest our Consumer business, we will still be a Co-op with global reach and scale, and a diverse product mix sold to customers in more than 100 countries. 'By focusing on our core strengths and the sales channels that deliver the highest returns, we have the confidence to target an average Return on Capital of 10-12%, which is above our 5-year average. This is alongside paying farmers the highest sustainable Farmgate Milk Price, which we are always committed to,' says Mr Hurrell. Fonterra continues to target a significant capital return to shareholders and unit holders following divestment.
NZ Herald
3 days ago
- Business
- NZ Herald
Listen to The Country online: Fonterra CEO Miles Hurrell on milk price forecast and earnings
Today on The Country radio show, host Jamie Mackay catches up with Fonterra chief executive Miles Hurrell to take a closer look at the co-op's forecast milk price for the 25/26 season. On with the show: Miles Hurrell: Fonterra's chief executive fires the shot opening for the forecast
RNZ News
3 days ago
- Business
- RNZ News
Fonterra boss blames soaring butter prices on global demand
Fonterra says the international market is pushing up butter prices the company has to reflect that in its returns to its farmer owners. Photo: Margaret Jaszowska for Unsplash The head of Fonterra says he understands consumers' frustration about the price of butter, but the co-op has to deliver for farmers. In its third-quarter update, Fonterra's profit for the nine months ended April rose 11 percent to $1.08 billion (or $1.16b excluding one-offs), driven by strong demand. But the same demand has meant soaring prices for household staples like butter . Recent Stats NZ data showed food prices rising at their fastest rate in more than a year, with butter prices up 65 percent. Fonterra chief executive Miles Hurrell said prices were driven by global demand. "We're a collection of 8500 small farmers and our job is to deliver for each of them," Hurrell said. "The international market is pushing these prices very high at the moment and our job is to reflect that in the returns that we give back to our farmer owners." Hurrell said he understood consumers' frustrations. "We hear that, we understand the situation that consumers here in New Zealand - and not just in New Zealand [but] globally are experiencing specifically around butter, but also starting to see that in other areas as well," he said. "But ultimately, our job is to understand what the international market is doing and put our prices and products out there accordingly." Fonterra's latest update indicated farmers could be in line for another bumper season, with the milk price forecast for the 2025/26 season at $10 per kilogram of milk solids, the same level as the current season. However, Fonterra warned of global uncertainty, and kept the forecast range wide at $8 to $11 per kg.
Reuters
3 days ago
- Business
- Reuters
NZ's dairy firm Fonterra raises annual profit forecast, shares rise
May 29 (Reuters) - New Zealand's Fonterra ( opens new tab raised the lower end of its annual earnings forecast on Thursday, after reporting higher third-quarter profit, helped by strength in the dairy giant's ingredients channel and consumer operations business. The company's shares rose 0.9% to NZ$4.6 and are headed for their best intraday session since May 20. The company anticipates stable near-term market demand and expects an initial farmgate price of NZ$10 per kilogram of milk solids (kgMS) for the next season, within the wider forecast range of NZ$8 to NZ$11 per kgMS. "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," said CEO Miles Hurrell. Fonterra's chief also backed its recent plans to explore divesting options for its global consumer unit, Fonterra Oceania and Fonterra Sri Lanka, including a sale or an initial public offering. "Divestment or an IPO could refine the earnings profile and unlock capital, positioning Fonterra as a focused B2B dairy leader," said Jeremy Sullivan, an investment advisor at Hamilton Hindin Greene. "This shift could boost earnings stability and target a 10-12% return on capital, surpassing the five-year average of ~9%." The company is now eyeing the year-end earnings per share to be between 65 New Zealand cents and 75 cents, higher than 55 to 75 cents forecast earlier. It logged a third-quarter normalised profit after tax of NZ$1.16 billion ($692.06 million), up 11% from a year earlier. The quarterly performance was driven by strength in the ingredients business and rising volumes at foodservice and consumer operations, Hurrell added. However, Sullivan said that earnings guidance blends confidence with caution, while the ingredients channel's margins hinge on global dairy price trends. ($1 = 1.6762 New Zealand dollars)
NZ Herald
3 days ago
- Business
- NZ Herald
How Fonterra stole the show at Bakery China
The show-stealing Fonterra tanker at the co-op's booth at Bakery China in Shanghai. Photo / Henry Acland, Fonterra Content brought to you by Fonterra It's difficult to steal the limelight at China's biggest bakery show, but Fonterra did just that last week. Bakery China, held in Shanghai over four days, sees as many as 400,000 people through its doors. That's similar to the entire population of Christchurch. Jackie
