No extra crumbs were found as Fonterra announced its second highest payout to suppliers today.The dairy giant had been tipped to boost its predicted $6.10 a kilogram of milksolids payout for the 2009/10 season, but has held firm.In addition, it will pay a
No extra crumbs were found as Fonterra announced its second highest payout to suppliers today.
The dairy giant had been tipped to boost its predicted $6.10 a kilogram of milksolids payout for the 2009/10 season, but has held firm.
In addition, it will pay a dividend of 27c a share and retain 33c a share.
Fonterra has also firmed up its forecast for the current season of $6.60/kgMS, plus a dividend of 40c-50c before retentions.
Farmers with one share for every kilo of milksolids produced (100%) will receive $6.37/kgMS for the 2009/10 season. However, structural changes designed to shore up the company’s balance sheet allowed for some farmers to have up to 120% against production.
For a farmer producing 100,000/kgMS, the 2009/10 payout provides a gross farmgate increase of $117,000 against the 2008/09 year to $637,000.
Fonterra will retain $438 million of the profits.
The company’s after tax profit for the year to July 31 was $685 million, 12% up on the previous year.
This includes $174 million of non-recurring gains, primarily from sales of non-strategic assets.
The distributable profit of 60c a share is higher than the 40-50c a share range earlier forecast by the Fonterra board.
Fonterra reported its balance sheet was the strongest it had been in its history with the gearing ratio reduced to 44.9%, down from 53% a year earlier.
The improved gearing was a reflection of the increase in equity to $862 million, attributed to both the share retentions and a further $459 million invested by farmers who accepted additional shares following capital restructuring.
At the end of July, Fonterra’s economic net interest bearing debt was $4.5 billion, nearly $730 million down on the previous year. As a result, reduced borrowing requirements, combined with lower interest rates, meant net finance costs were reduced by $135 million.
Chairman Sir Henry van der Heyden said Fonterra had come through the recession well with increased production to 1.286 billion/kgMS and a new export record of 2.1 million tonnes.
Chief executive Andrew Ferrier said the profit reflected a year of mixed underlying earnings, with a strong performance by its consumer businesses, but a reduced contribution from the ingredients businesses due to volatility in international dairy markets.
“Fonterra’s consumer businesses had strong earnings performances despite the significant adverse impact of exchange rate movements,” Mr Ferrier said.
He said on a normalised basis, the combined earnings of the consumer businesses were up 19% representing a 5th consecutive year of growth.
Earnings within parts of Fonterra’s ingredients businesses were put under pressure as market volatility meant that the prices for some products, such as cheese and casein, lagged international powder prices.
