Fonterra is expecting to post a huge loss this year.
The co-op estimates it will be as high as $675 million thanks to write-downs on its assets, so there will be no dividend payout.
Chief executive Miles Hurrell said while its earnings are in the expected range of 10-15c per share, "when you take into consideration these likely write-downs, we expect to make a reported loss of $590-675 million this year, which is a 37 to 42 cent loss per share".
He said Fonterra is "leaving no stone unturned in the work to turn our performance around".
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"Since September 2018 we've been re-evaluating all investments, major assets and partnerships to ensure they still meet the co-operative's needs... We have taken a hard look at our end-to-end business, including selling and reviewing the future of a number of assets that are no longer core to our strategy.
"The review process has also identified a small number of assets that we believe are overvalued, based on the outlook for their expected future returns."
- The write-downs include:
- $200 million on its investments in Brazil "due to the economic conditions" in the South American country
- $135 million on investments in troubled Venezuela
- $200 million on China Farms "due to the slower than expected operating performance"
- $200 million here in New Zealand, thanks to "the compounding effect of operational challenges, along with a slower than planned recovery in our market share"
- and $70 million on its businesses in Australia due to "continued drought, reduced domestic milk supply and aggressive competition in the Australian dairy industry".
"These are tough but necessary decisions we need to make to reflect today's realities," said Hurrell, who wants to reassure farmers the co-op's cashflow "remains strong".
But there won't be a dividend paid out this year.
"Our owners' livelihoods were front of mind when making this decision and we are well aware of the challenging environment farmers are operating in at the moment," said chairman John Monaghan.
"Ultimately, we are charged with acting in the best long-term interests of the co-op. The underlying performance of the business is in-line with the latest earnings guidance, but we cannot ignore the reported loss of $590 - $675 million once you look at the overall picture."
Not paying a dividend will help Fonterra pay back debt, Monaghan said.