Fonterra expects earnings to fall below forecasted figures

Dairy processing giant Fonterra has announced that the company will miss its forecasted figures by around 7.3 percent.

The company has sighted increased competition in Australia and drought in New Zealand as the two main factors that have contributed to the lower result.

The Weekly Times Now reports that earnings before interest & tax and one-off items will be $NZ0.079b below the forecast listed in its Shareholder’s Fund Prospectus last year, and earnings per share are predicted to be between 45 to 50 NZ cents per share.

"The drought has contributed to a 64 per cent rise in whole milk powder prices on GlobalDairyTrade since early 2013, and this had a temporary but significant negative impact on NZMP's (Fonterra’s marketing brand for its ingredients business) margins," said Fonterra’s chief executive Theo Spierings.

Despite a drop in EBIT, annual dividends of NZ 32 cents per share will remain unchanged along with the company’s forecast cash payout to farmer shareholders of $NZ6.12.

Farmgate prices will also remain in line with forecasted results at $NZ5.80 per kilograms of milk solids.

Fonterra is expecting to release its full earnings in late September. 


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