FCG fonterra co-operative group limited (ns)

Ann: CREDIT: FCG: Fonterra responds to Standard & Poor's credit watch

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    • Release Date: 13/08/15 15:36
    • Summary: CREDIT: FCG: Fonterra responds to Standard & Poor's credit watch
    • Price Sensitive: No
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    					FCG
    13/08/2015 15:36
    CREDIT
    PRICE SENSITIVE
    REL: 1536 HRS Fonterra Co-operative Group Limited
    
    CREDIT: FCG: Fonterra responds to Standard & Poor's credit watch
    
    13 AUGUST 2015
    
    Fonterra responds to Standard & Poor's credit watch
    
    Fonterra Co-operative Group Limited has been notified today (13 August) that
    rating agency Standard & Poor's has placed the Co-operative's credit rating
    on credit watch.
    
    Standard & Poor's said in its announcement that the decision reflected
    weakening global dairy market conditions.
    
    Chief Financial Officer Lukas Paravicini said: "Fonterra has taken proactive
    and positive steps to maintain the financial strength of the Co-op. We have
    continued to exercise financial prudence and discipline in challenging times
    for dairy globally."
    
    Measures include:
    o Significantly reducing capital expenditure - Fonterra has reviewed capital
    expenditure for the next two years and is now targeting a spend  $500million
    - $600million less for 2016 financial year (compared to financial year 2015)
    o Setting a prudent advance rate payment to our farmers for the current
    season given ongoing volatility of global  dairy prices
    o Progressing well with our business transformation that will deliver
    significant one-off and recurring savings for the business.
    
    "These measures reinforce our sound financial position and are enabling us to
    provide support to our farmers during this difficult period of low global
    dairy prices."
    
    Mr Paravicini said the Co-operative's current debt levels were in line with
    expectations and followed investments in New Zealand processing capacity,
    higher advance rates to farmers last season and planned investments in
    Fonterra's number one strategic market, China.
    
    "While current global prices are unsustainably low, we take a longer term
    view of the cyclical nature of the international dairy market and have
    confidence in the fundamentals for dairy," said Mr Paravicini.
    
    -ENDS-
    
    For further information contact:
    Abhy Maharaj
    Director Equity Markets
    Phone: +64 21 879 458
    
    Media queries should be directed to Fonterra Communications:
    Connie Buchanan
    External Communications Manager
    Phone: +64 21 507 072
    Email: [email protected]
    End CA:00268380 For:FCG    Type:CREDIT     Time:2015-08-13 15:36:13
    				
 
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