Fonterra reports “satisfactory” 9.6% lift in revenue

Posted by Daniel Palmer on 24th March 2009

Fonterra, the world’s largest dairy exporter, today reported a 9.6% rise in revenue for the first six months due to seasonal factors, a stronger contribution from regional consumer businesses and the lower NZ dollar.

The latest half year covered the period August 2008 to January 2009 and included two additional high production months (December and January), distorting comparisons with the previous half year which went from June 2007 to November 2007, the company noted.

Fonterra’s revenue rise was primarily driven by a sharp 53% increase in sales in Asia/Africa and the Middle East, while Australia and New Zealand revenue grew a robust 12% to $1.5 billion. The greatest contributor to their $8 billion of sales was again Commodities & Ingredients, which recorded a more sedate growth rate of 2%.

Adjusting for timing factors and including exchange hedging, however, total revenues would have been down by 7.6%, reflecting the lower international dairy commodity prices, the NZ-based dairy cooperative advised.

Chairman Henry van der Heyden said the interim result was satisfactory given the global economic meltdown and its impact on dairy markets.

“Despite this climate, our payout is still forecast to be $5.10, and our result shows Fonterra to be in reasonable shape given the turmoil in the world economy – it’s a tough time for everyone and Fonterra is no exception,” he explained. “We have taken, and will continue to take, the tough decisions to manage the business prudently in the current climate and get our farmers the highest payout.”

The payout was Fonterra’s third highest.