Fonterra increases 2021 forecast earnings guidance, narrows range

AUCKLAND: Dairy cooperative Fonterra has lifted the bottom end of its 2021 forecast earnings guidance and narrowed the range to 25c35c per share, from 20c35c per share.

Chief executive Miles Hurrell said strong demand for Fonterra and New Zealand milk and a disciplined, committed approach by staff to improving performance had enabled the move despite the challenges of Covid19.

While New Zealand’s biggest company was still preparing its halfyear accounts for release on March 17, it now had enough information to provide more clarity on its fullyear earnings guidance, he said.

The narrower forecast earnings range still reflected the usual uncertainties faced over any given year.

Fonterra expected its earnings performance to be heavily weighted to the first half of the financial year, he said.

A forecast farmgate milk price range of $6.90$7.50 per kilogram of milk solids was great for farmers and the economy, but rising dairy prices in the first half of the year put pressure on Fonterra’s sales margins, Mr Hurrell said.

The effect would be seen through the second half of the year, he said.

Fonterra is the world’s fifthbiggest dairy company by revenue and has 10,000 farmershareholders.

It also offers listed dividendcarrying, nonvoting units in farmer shares to the public. — The New Zealand Herald