Thursday, 21 May 2020 09:50

Fonterra weathers COVID-19 storm

Written by  Staff Reporters
Fonterra has weathered the effects of COVID-19. Fonterra has weathered the effects of COVID-19.

Fonterra has weathered the effects of COVID-19 to deliver an impressive third-quarter results.

For nine months ending April 30 this year, the co-op’s total group normalised Earnings Before Interest and Tax (EBIT) topped $815 million, an increase of $301 million on this time last year.

Fonterra chief executive Miles Hurrell attributes the result to work done over the last year to strengthen its balance sheet, and the co-op’s ability to respond quickly has helped manage the COVID-19 situation over the last few months. “We’re drawing on our global supply chain and diverse product and customer base to minimise disruptions for our customers and our business. 

“COVID-19 has affected virtually every country, market and industry, and as a result, the global dairy market is volatile and the outlook is uncertain. 

“This is a tough environment for everyone. As a New Zealand dairy co-op, exporting 95% of our products, many of the markets we do business in have always been prone to sudden shocks and this can impact where, when and what we sell. However, the global nature of COVID-19 is like nothing we’ve experienced before. 

“Like other businesses, we will feel the impact of COVID-19 and its flow-on effects but how and to what extent is still uncertain. We are drawing on all our experience in managing market volatility.”

Hurrell says he’s proud to lead a team “who genuinely care and recognise the importance of our farmer owners, unit holders, customers and local communities”. 

“The way our co-op has responded to COVID-19 has been a real highlight for me.”  

All three of Fonterra’s business units have delivered a good performance for the year to date, despite the negative impact COVID-19 had on the foodservice business in the third quarter.

Key results

  • Total Group Earnings Before Interest and Tax (EBIT): $1.1 billion, up from $378 million 
  • Total Group normalised EBIT: $815 million, up from $514 million 
  • Total Group normalised gross margin: $2.5 billion, up from $2.2 billion 
  • Normalised Total Group operating expenses: $1,665 million, down $148 million from $1,813 million 
  • Free cash flow: $698 million, up $1.4 billion
  • Net debt: $5.7 billion, down from $7.4 billion 

More like this

Overstayers irk farmers

A new law preventing the eviction of tenants from rental properties is causing a headache for some dairy farmers.

Memorable vintage

With a backdrop of COVID-19, this has been a harvest like no other.

Distributor focussing on farmer support

AGCO Australia and New Zealand has announced plans focused around protecting the welfare and livelihood of its customers, employees and the community during the COVID-19 pandemic. 

Featured

ANZCO makes a $30m profit

Meat company ANZCO Foods recorded its best-ever revenue of $1.7b and a net profit before tax of $30.6m for the year ended 31 December 2019.

 

M. bovis – we’re making headway

Ministry for Primary Industries chief science adviser, Dr John Roche on the indications New Zealand is winning the fight against Mycoplasma bovis.

Delays ruled out on water reforms

Delaying the introduction of new water reforms was not an option according to the two cabinet Ministers directly involved – Environment Minister David Parker and Agriculture Minister Damien O’Connor.

$700m for freshwater clean up

The Government has announced a $700 million fund to support the primary sector and other groups in meeting new clean water standards.

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Effluent power

Finnish dairy company Valio is on a mission to reduce milk’s carbon footprint to zero by 2035.

What’s in a name?

The man who coined the term ‘Gypsy Day’ is slightly miffed that a term he introduced to New Zealand’s farming…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter