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Fonterra continues to treat with good news show
Dairy giant Fonterra continues to treat its members to a good news show. Where it promised a slightly higher dividend at the end of February, the company now reports that much more dividend and also a higher milk price are coming. It should become official when the interim results are presented.
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In the run-up to this moment on March 20, Fonterra is already increasing the festive mood. The milk price for the current year will no NZ $9,50 amounts, but NZ$10,00 per kilo of milksolids, or €41,43 per 100 kilos of milk, while the dividend expectation is raised from 27 to 32 euro cents per share to 29 to 40 cents per share.
New Zealand's Fonterra members are having a record year, although not everything is final yet.
Meanwhile, the company is also busy looking to either sell or separately list its consumer business in New Zealand, as well as its operations in Australia and Sri Lanka. The company is currently conducting a roadshow for potential buyers in New Zealand, Australia and Asia, to see which option will be most attractive.
The potential divested parts have now been grouped together under an ad hoc name - the Mainland Group - with its own management. This group of companies represents a turnover of NZ $4,9 billion, with an estimated return of 4%.
For Fonterra management, setting aside and separately listing the Mainland Group has the advantage that it does not require the approval of the members. The sale of the group of companies does require the approval of the members.
The consumer activities to be sold are still making a significant contribution to Fonterra's record milk price this year, according to CEO Miles Hurrell.