Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
Speaking at the co-op’s annual general meeting in Invercargill today, McBride noted that despite all of the disruption at home and in global markets, Fonterra performed well.
“This demonstrates the value of a New Zealand owned co-operative of scale,” he says.
“Fonterra’s scale gives us a level of optionality that is unique in New Zealand dairy.
“It enables us to manage risk and uncertainty on behalf of our kiwi farming families.
“We have benefited greatly from our ability to move your milk between the markets, categories and products that deliver the most value.”
The AGM is being held in-person and online because of Covid travel restrictions in Auckland.
Fonterra’s management team, including chief executive Miles Hurrell, are taking part virtually. Fonterra’s Auckland and Australia based directors are also attending virtually.
McBride noted that for many Fonterra team members, 2021 has been incredibly tough.
“Many of our international team are working away from home, or in densely populated cities where COVID is rife.
“I’d like to use this opportunity to say a thank you to all of our international team on behalf of us farmers.”
He says the hard work and commitment of Fonterra people was reflected in its key 2021 financial results:
- A final farmgate Milk Price of $7.54, which exceeded opening forecast for the year.
- Net debt is down $872 million this year to be $3.8 billion, bringing gearing ratio down to just under 36%.
- Our Total Group normalised EBIT – which reflects the underlying performance of the business – was up 8% to $952 million.
- Normalised earnings per share was 34 cents, leading to total dividend payments of 20 cents for the year.
