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Significantly more profit and higher milk price at Fonterra
The New Zealand dairy cooperative Fonterra has the wind in its sails. In the first quarter of the broken financial year 2023/2024, profits almost collapsed. The improved margin also means there is room to increase the milk price. There is also the prospect of a nice subsequent payment.
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Fonterra said it had a strong first quarter, with profits growing 85% to $392 million. Based on the current daily rate, this amounts to more than €220 million. The sale of the Brazilian DPA is not included in this result. The gross profit margin increased from 15,5% last year to 21,4%.
CEO Miles Hurrel owes the strongly improved result to good sales opportunities in food service, consumer channels and the ingredients division. The CEO also notes improved demand from China, which is Fonterra's most important market. The cooperative says it is able to process more raw milk into high-quality dairy.
Milk prices on the rise
The CEO is positive about the future and expects that the current trend can be continued at least until the first half of the current financial year. This means that for the time being, a nice return of at least $0,50 per share is on the horizon for members. The milk price also benefits from the improved benefits. The forecast price for the current season has therefore been increased by $0,25 to $7,50 per kilo of milk solids. Despite this increase, it is the lowest basic milk price since 2020.