Fonterra first-quarter profit jumps 84% on strong protein, cheese margins
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Fonterra is benefiting from strong margins in its protein and cheese products.
Fonterra’s first-quarter profit jumped 84% as it benefits from strong margins in its protein and cheese products.
The country’s largest dairy processor said normalised after-tax profit increased to $214 million in the three months to October 31, from $116m last year. Sales rose 32% to $5.79 billion.
Under chief executive Miles Hurrell’s leadership, Fonterra has been selling overseas assets, pulling the co-operative’s focus back to New Zealand where he is looking to eke out more value from the milk produced by its 9,000 farmer shareholders.
Hurrell said Fonterra was making good progress and the long-term outlook for dairy remained strong.
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Fonterra raised its forecast for full-year earnings to 50-70 cents per share from 45-60cps.
STUFF
The co-operative is selling overseas assets to focus on getting more value from NZ milk.
In the latest quarter, Fonterra’s ingredients business benefited from favourable margins in its protein portfolio, particularly for casein and caseinate products used in medical nutrition, and whey protein concentrate used in products such as high protein beverages.
“The sustained strong margins in our protein portfolio give us the confidence to upgrade our earnings guidance, although the wider range reflects the volatility in the market which we expect to continue in the short to medium term,” Hurrell said.
“If these conditions continue for a further extended period, it could have an additional positive impact on forecast earnings.”
The co-operative’s foodservice business improved relative to the same period last year, but the high milk price put significant pressure on margins in both its…
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