Fonterra, Sharesies join to make share trading easier
Fonterra is teaming up with wealth app provider Sharesies to make it easier for its farmer shareholders to trade co-op shares among themselves.
Fonterra has scope to lift its payout from current guidance, but its losses on Beingmate will likely weigh on its earnings and dividend payments, says New Zealand brokerage firm OMF Financial.
With dairy prices strengthening, OMF says milk price models show scope for Fonterra to lift its milk prices by 25c/kgMS from its current guidance of $6.40/kgMS.
This is unaffected by the GDT price index easing by 0.5% at last week’s auction, the first decline of the year.
“We see scope for Fonterra to raise their payout by NZ$0.25/kgMS for 2017-18, which would provide a buffer against the co-op’s likely losses and write-down associated with its investment in Beingmate,” OMF says in its monthly dairy report.
“Recently, there have been growing concerns over Fonterra’s investment in Chinese infant formula producer Beingmate Baby & Child Food,” OMF says.
“Beingmate’s poor performance has a direct impact on Fonterra’s profitability: Fonterra’s share of Beingmate’s net loss was reported at $42 million in the full year 2017. We expect losses this year to weigh on Fonterra’s earnings and dividend payments.”
BNZ’s Doug Steel says the easing by 0.5% at last week’s GDT Event auction was close to expectations. “Prices remain 12.9% higher than at the start of the year and 3.5% up on a year ago. Wholemilk powder prices rose 0.3%, with an average price of US$3246/t.”
Steel says the result fits with the idea that the upward price influence from NZ’s adverse weather has run its course, although there may have been some reduction in demand due to the lunar new year. Only 152 bidders took part in this auction, the lowest number seen in the past year.
“The ongoing theme of large EU stockpiles of skim milk powder and elevated EU milk production continues to weigh on skim milk powder prices,” Steel said. “SMP prices fell 3%, with an average price of US$1,832/t.
“The level of current dairy product prices helps Fonterra’s $6.40 milk price forecast for the 2017-18 season look achieveable.
“There is upside [possibility] to our $6.30 view at current product price levels. Indeed, if current prices were to persist for the remainder of the season something above $6.40 looks possible. It all depends on where international prices track over the coming months and, critically, what effective exchange rate Fonterra has managed to achieve.”
Federated Farmers president Wayne Langford is claiming “some real success” on the 12 policy priorities it placed before the Coalition Government.
Federated Farmers is throwing its support behind the Fast-track Approvals Bill introduced by the Coalition Government to enable a fast-track decision-making process for infrastructure and development projects.
The latest report from ANZ isn’t good news for sheep farmers: lamb returns are forecast to remain low.
Divine table grapes that herald the start of a brand-new industry in Hawke’s Bay have been coming off vines in Maraekakaho.
In what appears to be a casualty of the downturn in the agricultural sector, a well-known machinery brand is now in the hands of liquidators and owing creditors $6.6 million.
One of New Zealand’s deepest breeder Jersey herds – known for its enduring connection through cattle with the UK’s longest reigning monarch, Queen Elizabeth II – will host its 75th anniversary celebration sale on-farm on April 22.