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- Release Date: 12/03/12 11:16
- Summary: FORECAST: FCG: FONTERRA REVISES 2012 PAYOUT FORECAST
- Price Sensitive: No
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FCG
12/03/2012 09:16
FORECAST
REL: 0916 HRS Fonterra Co-operative Group Limited
FORECAST: FCG: FONTERRA REVISES 2012 PAYOUT FORECAST
Fonterra has announced a revised payout forecast for the 2011/12 season of
$6.75 - $6.85, for a fully shared up farmer, 15 cents down on the previous
forecast.
The revised forecast comprises a lower Fonterra Farmgate Milk Price of $6.35
per kg milksolids, down from $6.50. The season's Distributable Profit range
forecast of NZD 570 - 720 million, equating to 40-50 cents per share remains
unchanged.
Fonterra is required to consider its Farmgate Milk Price every quarter as a
condition of the Dairy Industry Restructuring Act (DIRA).
Fonterra Chairman Sir Henry van der Heyden said the lower Farmgate Milk Price
forecast reflected declining commodity prices and a stronger New Zealand
dollar.
"We've had price declines in the five out of the last six Global Dairy Trade
(GDT) trading events," said Sir Henry.
Overall, the GDT-Trade Weighted Index is down 5.7 per cent since December 13
2011 when the forecast of $6.50 per kgMS was announced.
Sir Henry said the New Zealand dollar's continuing strength, higher levels of
global milk production, and uncertainties in international markets led to the
Board decision to lower the Fonterra Farmgate Milk Price forecast.
Chief Executive Theo Spierings said the trends were indicating for stronger
global production continuing into 2012.
"While we have had a strong start to the season in New Zealand, with record
milk flows, we are also seeing higher milk production levels in the US and
Europe.
"International milk powder demand, however, currently appears robust which
should help offset the impact of the stronger milk supply growth.
"In the past few weeks, global markets seem to be reacting to the ongoing
economic difficulties in Greece, the potential for conflict in the Middle
East and China's reduced growth forecast. These events appear to be having a
negative influence on most commodity prices.
"We think dairy commodity prices are likely to remain under some pressure
through to mid-2012," said Mr Spierings.
Fonterra will announce its interim results and dividend on March 29 2012.
End CA:00220581 For:FCG Type:FORECAST Time:2012-03-12 09:16:51
