Fonterra announced its annual results, final Farmgate Milk Price of $7.14 per kgMS and a dividend of 5 cents per share for the 2019/20 season, bringing the final cash payout for farmers to $7.19 per kgMS.
Fonterra CEO Miles Hurrell says 2019/20 was a good year for the Co-op, with profit up, debt down and a strong milk price. “We increased our profit after tax by more than $1 billion, reduced our debt by more than $1 billion and this has put us in a position to start paying dividends again,” he says.
Total Group normalised EBIT was significantly up on last year from a loss of $17 million to earnings of $1.1 billion. This includes gains from asset sales, and impairments and costs relating to the strategic review.
Ingredients’ normalised EBIT improved from $790 million last year to $827 million this year, with normalised gross profit up $165 million to $1.6 billion.
Greater China Foodservice’s normalised EBIT increased from $114 million last year to $169 million this year.
The Consumer business’ normalised EBIT reduced to $149 million from $227 million, mainly as a result of impairments of $57 million relating to the Chesdale brand and New Zealand Consumer business’ goodwill.
Australian Consumer business performed strongly with sales continuing to increase thanks to its popular beverage, spreads and cheese products.
Dividend and Farmgate Milk Price for 2019/20
Fonterra announced a dividend for the 2020 Financial Year of 5 cents per share and final Farmgate Milk Price for the 2019/20 season of $7.14 per kgMS. Fonterra Chairman John Monaghan says for a 100% share backed farm, this gave them a final cash payout of $7.19 per kgMS. “This year marks a return to paying dividends, a position we expect to maintain in the future, assuming normal operating conditions.
Outlook
Fonterra has announced a 2020/21 earnings guidance range of 20-35 cents per share and has also reaffirmed its 2020/21 forecast Farmgate Milk Price range of $5.90-$6.90 per kgMS.
