#Fonterra issues profit warning

Share on twitter
Share on facebook
Share on linkedin
Share on whatsapp
Share on email

Fonterra says a sharp fall in dairy prices means its 2014 operating profit will come in at the lower end of the forecast range.

In an update posted to the NZX this afternoon, the dairy giant reconfirmed its guidance of $500 million to $600m of earnings before interest and tax.

However, Fonterra expected the final figure to come in at the »lower end» of the range, reflecting the major fall in dairy prices.

The GlobalDairyTrade price index has dropped 45 per cent from its high in February this year, due to increased supply and muted global demand.

Fonterra said imports into the Chinese market from all parts of the world continued to grow on a year-on-year basis, up nine per cent in July.

However, that was still the smallest year-on-year increase in 12 months.

The pricing woes have forced Fonterra to cut its farm-gate milk price forecast from $7 per kilogram of milk solids to $6, implying an almost $4 billion drop in farmer income compared with last season’s $8.40.

Bank economists are forecasting a $5.80 payout, with further downside if commodity prices do not rebound strongly by year’s end.

Higher production may partly offset farmers’ income slump, with Fonterra reaffirming its earlier forecast that milk volumes would grow 2 per cent to 1616 million kg/ms in the current season.

It said milk production in most regions of the North Island had been progressing well, with good pasture growth pushing volumes above forecast.

Rain had caused some difficulties in Northland, with some areas flooding three times in recent months.

Milk collection for the season to August 31 was 127 million kg/MS, up 5.4 per cent on the same period last season.

Source: Stuff

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

Te puede interesar

Notas
Relacionadas