Fonterra net profit down 36 per cent

  • 21/03/2018
Fonterra net profit down 36 per cent
Photo credit: Newshub

Dairy giant Fonterra has raised its 2017-18 milk price forecast, but taken a 36 per cent hit to its normalised net profit.

The cooperative lifted its forecast milk gate payout to $6.55 per kilogram of solids for the season on Wednesday, up from $6.40 forecast in December.

Combined with an expected 25-to-35-cent per share full-year dividend, it brings the forecast cash payout to suppliers to $6.80 to $6.90.

Chairman John Wilson says the growth in global demand is buoying prices, particular for whole milk powder.

"While the global supply and demand picture remains positive and we expect prices to stay around current levels, we will be watching for any impact on market sentiment as spring production volumes build in Europe," he said.

But in its interim results on Wednesday, Fonterra said net normalised profit after tax had fallen 36 per cent from its 2017 result, to $248 million.

While revenue was up 6 per cent, the company's earnings before interest and taxes were down 25 per cent from 2017.

With the one-off payments to Danone, over the botulism contamination scare, and the Beingmate write-off factored in, the cooperative made a loss of $348m, a 183 per cent drop in net profit after tax from the 2017 interim result.