Fonterra raises quarterly profit forecast

Fonterra stated this when presenting its half-year figures. The dairy producer continues to face a volatile market environment and associated challenges, said CEO Miles Hurrell. Yet he sees better performance, with greater product sales and better margins on average than a year earlier. This is with the caveat that Fonterra's current turnover must be corrected for the sale of Soprole. 

The milk price forecast remains unchanged compared to the forecast at the beginning of February. The so-called 'mid-range price' was then increased by 30 cents per kilo of fat and protein (milk solids) from NZ $7,50 to NZ $7,80. The milk price search area will be increased from NZ$7,00 to NZ$8,00 per kilo of fat and protein to NZ$7,30 to NZ$8,30 per kilo of fat and protein.  

Now the expectation for earnings per share has also been increased from 33 to 40 cents. As a result, an interim dividend of 15 dollar cents per share has been declared, which is 5 cents higher than last year.

The half-year profit increased by 23% due to the better results, or by €71 million to €376 million. This is mainly due to better sales performance (particularly bulk) on the world market (Global Markets) and better sales of food service products, especially in China. The results of the core activities were actually under some pressure. 

Like other large dairy companies, Fonterra is also working hard to reduce emissions and therefore its CO2 footprint. However, it mainly works to limit so-called scope 1 and 2 emissions, which the company has direct control over. The main goal is to phase out the use of coal and switch to the use of biomass, among other things.