Fonterra last week announced a strong set of results for the financial year ending 31 July 2022, reflecting a 2021-22 Farmgate milk price of NZ$9.30 per kgMS and normalised profit after tax of NZ$591 million.
With a total dividend of 20 cents per share to our fully shared-up farmers – comprising of an interim dividend of 5 cents per share and a final dividend of 15 cents per share – the final cash pay-out for farmers is $9.50.
Total Group normalised Earnings Before Interest and Taxes (EBIT) was NZ$991 million, up NZ$39 million or 4 per cent on the prior year.
Chief executive Miles Hurrell said despite the challenges, including increased costs associated with supply chain volatility, 2021-22 was a good year for the co-op.
“These results demonstrate that our decisions relating to product mix, market diversification, quality products and resilient supply chain, mean the co-op is able to deliver both a strong milk price and robust financial performance in a tough global operating environment.
“The co-op is pleased to be able to pay a total dividend of 20 cents per share for our farmer owners and unit holders. And this year’s higher Farmgate milk price is the strongest it has ever been, which is great news for our farmers. New Zealand also benefits from this, with $13.7 billion returned into the economy in milk price payments alone this year.
“Importantly, one year on, the co-op is making tangible progress against our strategy – namely to focus on New Zealand milk, be a leader in sustainability and a leader in dairy innovation and science.
“As part of the strategic review of the ownership of our milk pools outside New Zealand, we continue to make progress, with the sales process for the Soprole business progressing.
“Meanwhile, we’ve looked at a number of options for our Australian business and have decided that it’s in the Co-op’s best interests to maintain full ownership.”
Australia played an important role in the co-op’s consumer strategy with a number of common and complementary brands and products and as a destination for our New Zealand milk solids, he said.
“The business is going well, and it will play a key role in helping us get to our 2030 strategic targets,” he said.
“As part of our strategy to 2030, we set a goal of a return of about $1 billion to shareholders and unitholders which anticipated divestments including Soprole and a stake in our Australian business. Even though we have decided not to sell a stake in our Australian business, we are still committed to targeting a significant capital return to our shareholders and unitholders. The amount of any capital return will ultimately be determined on a number of factors including the successful completion of the divestment programme as well as our ongoing debt and earnings levels.
“Our positive performance in 2021-22 would not have been possible without the continuing hard work of employees and our farmer owners, and I want to thank every one of them for their commitment and support.”
Register for the Rural Recharge event before July 6. File Photo: PIXABAY
