Fonterra announces strong half year, despite revenue drop in Australia
Dairy multinational co-operative Fonterra has reported a first-half profit rise of 18 per cent for the six months leading to February 2012. However, the dairy giant’s consumer business profits in New Zealand and Australia have continued to drop.
Announcing its results today, Fonterra said its net income rose to NZ$346 million in the six months ended, from NZ$293 million a year earlier.
Fonterra cited surging demand from Asia for the strong half year results, adding that the volume of shipments to Asia was at a record high for the company.
Fonterra confirmed its current forecast Payout range (before retentions) for the 2011/12 season of NZ$6.75 – NZ$6.85 for a fully shared up farmer.
Commenting on the results, Fonterra Chairman Sir Henry van der Heyden said, “Good spring and early summer growing conditions across most of the country led to strong growth in New Zealand dairy production and record volumes.
“Fonterra’s milk collections for the season to date were up 10 per cent on the same period in 2011. These record milk collections flowed into record production, with a new export volume record achieved in December 2011.”
Fonterra’s Australia-New Zealand consumer business revenue down
Fonterra’s Australia-New Zealand consumer business felt the impact of pricing pressure which reduced earnings. This included the effect of supermarket discounting of home-brand milk products.
Australia/New Zealand revenue was down four per cent to NZ$2 billion from NZ$2.1 billion in the same period last year, reflecting the challenging retail environment, and the ongoing pricing battle that appears to have impacted suppliers’ margins.