Fonterra increases payout forecast farmer payout

Fonterra Co-operative Group is increasing its total forecast cash payout to $4.95-$5.00 per kilogram of milk solids.
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The group announced on Monday that it is increasing its forecast earnings per share range for the current financial year to 45-55 cents.
With a forecast Farmgate milk price of $4.60, this lifts the total available payout to $5.05-5.15kgMS.
Fonterra is also increasing the rate at which farmers are paid the co-operative support of 50 cents per kgMS, with the total amount paid up to December going from 18 cents to 25 cents.
Federated Farmers dairy spokesman Andrew Hoggard welcomed the good, but unexpected news.
«I was expecting this week to be negative news with the global dairy auction on Wednesday, but it’s good to get some positive news for a change,» Hoggard said.
Farmers had been giving Fonterra a hard time over the past year about improving performance and dividend, so it was good to see the better results.
Chairman John Wilson  said performance in the August 1 to October 31 2015 period built on the strong second half of the 2015 financial year.
«While it is tough on farm due to low global milk prices, farmers will welcome the ongoing improvement in Fonterra’s performance delivering increased returns.
«Performance is well ahead of last year and we are hitting our targets on gross margins and operating and capital expenses.
«At the same time, the acceleration of business transformation initiatives is generating significant cash savings.  We are on track, and therefore able to lift our forecast earnings per share range.»
Fonterra was also expecting to cut the New Zealand milk collections by at least 5 per cent this season, equivalent to around 150,000 tonnes of whole milk powder.
Since August, Fonterra has reduced the amount of product it expects to offer on the GlobalDairyTrade platform over the year by 146,000 tonnes.
Margins increased to 23 per cent from 14 per cent in the first quarter, Spierings said.
«Our first quarter ingredients performance reflects improved product stream returns and margins are tracking well. With less milk this season, and additional capacity, we have taken the opportunity to optimise our product mix.»
Hoggard said Fonterra would probably put much of its profit into debt reduction, besides to higher payments to farmers.
«They’ve done all the upgrades of the plants, the Beingmate deal is done, there might be some small things on the horizon but I imagine most of it will be going into debt reduction,» he said.

 

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.

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