FONTERRA FORECASTS UP TO NZ$675M LOSS FOR YEAR

Dairy giant Fonterra is forecasting another big loss as it writes down the value of underperforming overseas assets.

The co-operative is forecasting a loss of between NZ$590 million (FJ$829m) and NZ$675m (FJ$949m) for the year current financial year.

Fonterra said it expected to write down the value of four significant overseas ventures in South America, China and Australia by more than NZ$600m (FJ$843m).

The writedowns come as it reviews its business from top to bottom and looks to cut its debt by NZ$800m (FJ$1,125m) this year. Fonterra has decided not to pay a dividend for the financial year based on the losses, in an effort to pay down more of the cooperative’s debt. In a statement, Fonterra Group chief executive Miles Hurrell said the company was leaving no stone unturned in re-evaluating all its investments, major assets and partnerships.

“We have taken a hard look at our end-toend business, including selling and reviewing the future of a number of assets that are no longer core to our strategy.” Fonterra’s New Zealand consumer business was also being written down by about NZ$200m (FJ$281m) following the sale of Tip Top and a slower than expected recovery in market share.

Mr Hurrell acknowledged farmers and unit holders would be frustrated by the writedowns.

“I want to reassure them that they do not, in any way, impact our ability to continue to operate.

“Our cashflow remains strong, our debt has reduced and the underlying performance of the business for Financial Year 2019 is in line with our latest earnings guidance of 10-15 cents per share.” Source: