Shareholders say sale was inevitable – Brendon McMahon:
The possible sale of Westland Milk Products to China is a ”sad day” for the West Coast but necessary to save the business, a sample of farmer-shareholders said yesterday.
The Hokitika dairy co-operative, praised for years for retaining its independence in the face of Fonterra amalgamations, is poised to be sold to the Chinese dairy giant Yili.
Harihari dairy farmer and former board member Jon Sullivan greeted the news yesterday morning with ”she’s gone”.
Farmers had been left with ”no choice” but to sell, he said. . .
Fonterra Co-operative Group Limited today announced its 2019 Interim Results which show the Co-op has returned to profitability with a Net Profit After Tax (NPAT) of $80 million, but normalised Earnings Before Interest and Tax (EBIT) are down 29% on the same period last year to $323 million.
• Key numbers in Interim Results
o Sales volumes 10.7 billion liquid milk equivalents (LME), up 2%
o Revenue $9.7 billion, down 1%
o Normalised EBIT: $323 million, down 29%
o NPAT: $80 million, up 123%
o Total normalised gross margin: $1.5 billion
Ingredients Gross Margin: $791 million, down 9%
Consumer and Foodservice Gross Margin: $766 million, down 7%
o Full year forecast earnings: 15-25 cents per share
o Forecast Farmgate Milk Price: $6.30-$6.60 per kgMS
• Sales process started for Fonterra’s 50% share of DFE Pharma
• Completed the sale of Corporacion Inlaca to Mirona
• Update on full strategy review . .
Fonterra to hit debt reduction target from asset sales – Paul McBeth:
(BusinessDesk) – Fonterra Cooperative Group expects to slice $800 million from its debt ledger through the sale of assets already signalled for the block.
The world’s biggest dairy exporter is strengthening its balance sheet as part of its wider strategic review. That’s included the divestment of a range of assets no longer deemed central to the cooperative’s future, the latest of which was a 50 percent stake in DFE Pharma – a joint venture with FrieslandCampina which supplies bulking agents, or excipients, in medicines including tablets and inhalers.
Fonterra has already announced plans to sell ice-cream maker Tip Top, with investment bank First NZ Capital receiving final bids earlier this month. It’s also considering its options for its 18.8 percent stake in Beingmate Baby & Child Food. . .
Encouraging signs emerged this week that key elements in the structure of NZ’s largest export industry are whipping themselves back into the shape they should be.
The giant co-op Fonterra has gone back into the black with a net profit of $80 million in the first half, after previously recording a net loss of $186m.
Meanwhile Westland Milk Products, NZ’s second biggest dairy co-op, is in line to be sold to China’s biggest dairy company, Yili, in a $588m transaction that would inject nearly half a million dollars into the operations of each of its suppliers. . .
Fonterra’s culture change– Craig Hickman:
Is it just me or is Fonterra undergoing a remarkably rapid culture shift in a very short space of time?
Last year I attended the Ashburton leg of the Fonterra Financial Results Roadshow: quite apart from the delicious lunch and sneak preview of the new Whittaker’s ice cream, it was a chance to hear then interim-CEO Miles Hurrell and new board chair John Monaghan deal with the unpleasant reality of Fonterra’s first ever financial loss.
Miles especially came across as humble, honest and realistic, and those are attributes in direct contrast to the brash and overly optimistic Fonterra leadership we are used to seeing. . .
The Fonterra Shareholders’ Council supports today’s acknowledgement that fundamental change is needed to improve the performance of the Co-operative.
“Fonterra’s farmer shareholders will agree that the results announced today are not where they should be,” says Council Chairman Duncan Coull. “The Shareholders’ Council backs the Board and Management’s initiative to thoroughly review strategy. A well defined and executed strategy focused on our farmers’ milk is critical to maintaining sustainable returns and an enduring co-operative for generations to come.” . .
– NPAT half year profit of $37.3 million
– Re-confirmed guidance for canned infant formula volumes of 41,000 – 45,000 MT
– Manufacturing efficiencies have supported improved production and sales volumes
– Key growth projects including Synlait Pokeno and our Advanced Liquid Dairy Packaging Facility remain on track
– New growth opportunities in liquid milk, Talbot Forest Cheese and lactoferrin expansion
– New purpose ‘Doing Milk Differently for a Healthier World’ established. . .
Hyslop elected to Beef + Lamb directorship – Sally Rae:
Irrigation New Zealand chairwoman Nicky Hyslop has ousted sitting Beef + Lamb New Zealand director Bill Wright.
She beat Mr Wright, a Cave farmer, by a margin of 1808 votes in the recent Central South Island director election.
Mrs Hyslop and her husband Jonty farm Levels Estate, an intensive sheep, beef and arable property on the outskirts of Timaru.
Mr Wright was elected in 2016, having previously been chairman of the B+LNZ Central South Island Farmer Council for six years. . .
One of closest commercial kiwifruit orchards to Auckland’s urban boundary – with potential to treble its production capacity – been placed on the market for sale.
Known as MacLachlan Orchard, the 12.2-hectare property at 90 Mullins Road in Ardmore is planted on flat land, and is forecast to produce some 42,000 trays of fruit in the current season.
The orchard’s 3.3 canopy hectares of productive land comprises some 2.29-canopy hectares of the Hayward green kiwifruit variety and 1.07 canopy hectares of the G3 gold kiwifruit strain picked off vines which were grafted some six years ago. . .