According to broker house Forsyth Barr, the company will show a profit of $389m (€233.4m). That figure is up 136% from last year, on revenues of more than $9bn (€5.4bn), which is down 5% on last year.
The strong profit comes on the back of lower payout milk prices.
Keith Woodford, an independent consultant and former professor of agribusiness at Lincoln University, said Fonterra had to make as much as possible, “personally I’d be looking for north of $400m for the six months and over $800m for the full year.”
“That’s where they need to be heading towards if they are going to pay the dividend they‘ve been suggesting.”
Extending loan schemes
He went on to say that some of the global factors that Fonterra was blaming might actually boost its profit.
“It’s because of those fluctuations, which Fonterra can do nothing about, that the market will be looking to see what’s going on in the underlying areas.”
Whether loan schemes can be extended like last year will be a considered factor by both farmers and other people in the industry, such as the banks.
Last year, Fonterra offered a two-year, interest-free loan of 50c/ kg of share-backed milk solids produced from 1 June to 31 December to struggling farmers.
The strong profit comes on the back of lower payout milk prices.
Keith Woodford, an independent consultant and former professor of agribusiness at Lincoln University, said Fonterra had to make as much as possible, “personally I’d be looking for north of $400m for the six months and over $800m for the full year.”
“That’s where they need to be heading towards if they are going to pay the dividend they‘ve been suggesting.”
Extending loan schemes
He went on to say that some of the global factors that Fonterra was blaming might actually boost its profit.
“It’s because of those fluctuations, which Fonterra can do nothing about, that the market will be looking to see what’s going on in the underlying areas.”
Whether loan schemes can be extended like last year will be a considered factor by both farmers and other people in the industry, such as the banks.
Last year, Fonterra offered a two-year, interest-free loan of 50c/ kg of share-backed milk solids produced from 1 June to 31 December to struggling farmers.
http://www.farmersjournal.ie/fonterra-half-year-profit-projected-to-jump-136-203839