Fonterra shares up on upgraded earnings forecast
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More news: Shares in Fonterra were up more than 2% at $3.50 in early trading on the ASX after the New Zealand dairy giant lifted its forecast for full year earnings amid higher sales volume and rising milk prices in the third quarter.
Fonterra now expects FY24 earnings from continuing operations to be between 60 NZ cents and 70 NZ cents per share, up from NZ 50 cents to NZ 65 cents per share.
Fonterra lifts full year earnings forecast
The news: New Zealand dairy co-operative Fonterra has lifted its forecast for full year earnings after higher sales volume and rising milk prices helped deliver a steady third quarter performance.
The numbers: The dairy company reported a 27% fall in statutory net profit for the three months to April due to one-off gains, but said profit from continuing operations rose 2% to NZD1.01 billion ($930 million).
As a result, Fonterra lifted its guidance range for FY24 earnings for continuing operations to between 60 NZ cents and 70 NZ cents per share, from 50 NZ cents to 65 NZ cents cents per share.
The context: CEO Miles Hurrell said the co-operative’s foodservice and consumer channels in particular had a strong third quarter with a lift in earnings compared to the same time last year. Milk supply and demand dynamics for the 2024/25 season remain finely balanced and China import volumes have not yet recovered to historic levels, he said.
The dual-listed Fonterra, one of New Zealand's largest companies, is forecasting an opening 2024/25 season Farmgate Milk Price of NZD7.25 to NZD8.75 per kg of milk solids (kgMS) with a midpoint of NZD8.00 per kgMS.
Fonterra, which earlier this month outlined a plan to divest its Fonterra Oceania business and the Fonterra Sri Lanka business, said the group has received a "high volume of interest" from parties looking to be involved in the potential divestment.
The source: ASX announcement
