Fonterra completes reset

Date: 23.09.2021Source: Fonterra Cooperative Group

Fonterra completes reset and announces annual results and long-term growth plan out to 2030

Annual Results Summary

  • Total pay-out for 2020/21 season: $7.74 per kgMS
  • Final 2020/21 Farmgate Milk Price: $7.54 per kgMS
  • 2020/21 dividend: 20 cents per share, comprised of 5 cent interim dividend and 15 cent final dividend
  • Reported Profit After Tax: $599 million, down $60 million
  • Normalised Profit After Tax: $588 million, up $190 million
  • Total Group normalised EBIT: $952 million, up $73 million
  • Net debt: $3.8 billion, down $872 million
  • Debt to EBITDA ratio: 2.7x improved from 3.3x
  • Full year normalised earnings per share: 34 cents

Fonterra Co-operative Group Limited has announced a strong set of results for the 2021 financial year, reflected in a final Farmgate Milk Price of $7.54, normalised earnings per share of 34 cents and a final dividend of 15 cents, taking the total dividend for the year to 20 cents per share. The results come as Fonterra moves through its business reset and into a new phase of growing the value of its business.

Said Miles Hurrell, CEO, Fonterra: “We’ve stuck to our strategy of maximising the value of our New Zealand milk, moved to a customer-led operating model and strengthened our balance sheet. The results and total pay-out we’ve announced today show what we can achieve when we focus on quality execution and an aligned Co-op. I want to thank our farmer owners and employees for their hard work and commitment over the last few years that has got us to this position. Together, we’ve shored up foundations and done this despite the challenges of operating in a COVID-19 world.

“Although the higher milk price and tightening margins put pressure on earnings in the final quarter, this is a strong overall business performance, allowing us to deliver $11.6 billion to the New Zealand economy through the total pay-out to farmers. The work we’ve done as part of the 2019 strategic reset means we’re well placed to take advantage of favourable industry dynamics. Growing global demand for dairy coupled with constrained supply has resulted in high prices for our milk. Our resilient supply chain has allowed us to get products to market and the healthy demand for our farmers’ New Zealand milk has seen a record shipping year for the Co-op.

“We’ve continued to reshape our business and the sales of our joint venture farms and wholly-owned farming hubs in China. Our continued focus is to get our New Zealand milk to the world.”

Total Group normalised EBIT, which reflects underlying business performance, was up 8% to $952 million, with Total Group normalised operating expenditure down 3% to $2.2 billion.  For more visit Fonterra.com

David Cox / IDM

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