Fronterra Full-Year Earnings Climb 65% as Milk Costs Decline
Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said full-year earnings jumped 65% as low milk prices boosted earnings from products such as cheese and infant formula.
Net income rose to NZ$834 million ($613 million) in the year ended July 31, the Auckland-based company said Thursday. Earnings per share were $0.51, within the projected 45-55 cent range, and the company reiterated it will pay a full-year dividend of $0.40 a share, up from $0.25 a year earlier.
Fonterra targeted increased earnings and higher dividends for its 10,500 farmer shareholders as payments for their milk fell to a nine-year low and resulted in as many as 80% operating at a loss last season. The company cut jobs and sold assets to improve efficiency and strengthen its balance sheet, allowing it to deliver higher dividends to help farmers through the global milk price slump.
“Our business strategy is serving us well,” said Chairman John Wilson. “We are moving more milk into higher-returning consumer and food-service products.”
Shares in the Fonterra Shareholders’ Fund, securities that track the cooperative’s earnings and dividend, were unchanged at NZ$5.93 at 10:07 a.m. in Wellington.
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