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

From coal to pellets

Fonterra is on track to meeting an interim target of achieving a 30% reduction in emissions by 2030.

Is he the right Guy for Fonterra?

Former Primary Industries Minister and Fonterra board aspirant Nathan Guy believes his relationships with bureaucrats in Wellington will help the co-op’s farmers immensely.

Featured

Awards help winners’ fine tune

Newly-crowned Share Farmers of the Year Sarah and Aidan Stevenson are looking forward to their leadership roles over the next 12 months.

 

Living the dream on farm

DairyNZ board candidate Cole Groves says he is “living the dream” as a dairy farmer, milking just over 400 cows near Hinds in Mid-Canterbury.

National

Effluent expo canned

The Effluent & Environment Expo, scheduled for early November in Hamilton, has been cancelled.

Fonterra back in the black

Fonterra chief executive Miles Hurrell says 2019/20 was a good year for the co-op, with profit up, debt down and…

Machinery & Products

Mowers get a makeover

Well known throughout New Zealand over the past 18 years, Pottinger has redesigned its rear-mounted Novadisc mowers to incorporate a…

Hardy spotlight

High quality, reliable lighting is essential for anyone involved in agriculture or the great outdoors.

Simmm twin water blasters

Italian made Simmm Power Cleaner 100/11 and Power Gun 100/11 single-phase (230 volt) electric water blasters are proving popular in…

OPD argument raging on

A stoush is brewing with the Federal Chamber of Automotive Industries (FCAI) heavily criticising Farmsafe Australia’s recent Safer Farm Report.

» Latest Print Issues Online

Milking It

Cows and earthquakes

OPINION: It has long been suggested that animals have senses that humans don’t, and often behave differently than usual shortly…

Battle is on

OPINION: One of Australia’s biggest dairy businesses is back on the market after the Federal Government knocked back a bid…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter