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Fonterra more confident about market after second record
The New Zealand dairy giant Fonterra has had another record year, with a slightly lower milk price than the year before, but with a much higher profit. The results seemed to be spoiled in advance by concerns about the market, but now the company is seeing a little more light again.
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More than a month ago, CEO Miles Hurrell expected a recovery in the second half of 2024 at the earliest, but now he sees an improving market again 'early in 2024'.
The dairy market has been in flux during this calendar year and continues to be so. Fonterra knew it would have a good financial year, but also saw that more and more dark clouds were gathering over the dairy market over the course of 2023. That is why the milk price forecast has been adjusted several times, sometimes very close together. In the last few weeks, there seems to be slightly more positive sentiment in the market, partly because China is becoming more active as a buyer again.
However, last year's results are very good. Turnover increased from €12.164 million (€12,16 billion) to €13.652 million. Profits rose much more. After tax, this amounted to €876 million, compared to €324 million the year before. However, the high profit over the past year also includes a one-off gain of €144 million due to the sale of Chilean subsidiary Soprole.
The milk price is NZ $8,22 per kilo of milk solids lower than the NZ $9,30 of the previous year, but still quite good, especially since there is still a total dividend of NZ $1,00 per kilo of milk solids (NZ $0,95 per share) is exceeded. That's NZ$0,59 more than the year before.