Fonterra revises earning guidance down, drops predicted farmgate price

Fonterra has announced an increased revenue of $15 billion for the nine months to April 2019 in its Q3 financial results on Thursday.

The figure is up one percent on the same period last year, while sales volumes were 16.6 billion liquid milk equivalent (LME), up 4 percent.

However, the dairy giant's normalised EBIT was down 9 percent to $522 million.

It has also revised its earnings guidance range from 15 - 25 cents per share to 10 - 15 cents per share.

The dairy giant has narrowed its 2018/19 forecast Farmgate Milk Price range from $6.30 - $6.60 per kgMS range by 20 cents to $6.30 - $6.40per kgMS.

It had been expected to lift it, with ASB economist Nathan Penny predicting an18/19 milk price towards the upper end of the current $6.30 to $6.60/kg range.

It has also announced a forecast 2019/20 Farmgate Milk Price range of $6.25 - $7.25 per kgMS.

Fonterra last week announced the sale of ice cream company, Tip Top to UK-based Froneri, owned by Nestle and R&R Ice Cream, for $380 million.

The dairy giant is looking to slash debt by $800 million, and turn its performance around after posting a net loss of $196 million for the year ending July 2018.

More to come.