Fonterra Co-operative Group Limited (Fonterra) is a dairy co-operative, owned and supplied by nearly 9,000 farming families in Aotearoa, New Zealand. Through the spirit of co-operation and a can-do attitude, Fonterra’s farmers, along with 20,000 employees around the world, share the goodness of our milk through innovative consumer, foodservice and ingredient brands. Sustainability is at the heart of everything we do, and we’re committed to leaving things in a better way than we found them. Everyday people working hard to be Good Together in the community.
The Fonterra Shareholders' Fund (FSF) is a registered managed investment scheme under the Financial Markets Conduct Act 2013. The FSF provides investors an opportunity to invest in the performance of Fonterra. Outside investors who are not allowed to hold shares in Fonterra can invest in units in the FSF which gives them access to economic rights (such as distributions and capital movements), similar to those of a share.
The following information was extracted from Fonterra Co-operative Group Limited's Full Year results, released 25 September 2024:
Fonterra continues momentum in FY24, announces special dividend
• Profit after tax: NZ $1,168 million
• Continuing operations EBIT*: NZ $1,560 million
• Continuing operations earnings* per share: 70 cents per share
• Return on capital: 11.3%
• Total dividend: 55 cents per share, comprising:
• Full year milk collections: 1,471 million kgMS
• Final 2023/24 season Farmgate Milk Price: NZ$7.83 per kgMS
Business performance
The Co-op reported a return on capital for FY24 of 11.3%, above the target range for FY24.
Earnings (EBIT) from continuing operations were $1,560 million and continue to be well above previous years, albeit down on FY23 which benefitted from elevated price relativities.
Fonterra’s profit after tax from continuing operations was $1,168 million, equivalent to 70 cents per share.
“Our FY24 earnings were driven by higher margins and increased sales volumes in our Foodservice and Consumer channels. Our Ingredients channel also continued to deliver strong returns, although down when compared to the record result seen in FY23,” says Mr Hurrell.
Sales volumes from continuing operations were down 1% to 3,470 kMT and gross margins were maintained at 17%.
“We remain focused on making progress against our two efficiency metrics while also investing in the areas that will improve long-term performance and the resilience of the Co-op.
“Our core operations manufacturing costs per kgMS reduced year-on-year by 2% to $2.58 per kgMS, reflecting both operational improvements and improved input costs.
“Across the year we also achieved savings in our operating expenses which largely offset the impacts of inflation. However, our cash operating expenses per kgMS are up mainly due to our investment in IT and digital transformation projects.
“Our balance sheet position remains strong, providing optionality and flexibility for the future and resilience against volatility.
“We have net debt of $2.6 billion, $600 million lower than last year, due to strong underlying operating performance.
Our gearing ratio of 24% reflects our lower net debt position and higher equity from strong earnings,” says Mr Hurrell.
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