By LIAM DANN
Fonterra is expected to report a return to profit tomorrow.
But a strong balance sheet for the year to May 31 will be overshadowed by confirmation of a low payout to farmers.
The result should hold no big surprises for dairy farmers, who have heard the worst already.
Fonterra re-confirmed
its final payout estimate of $3.60/kg of milk solids as recently as May and industry insiders say it is unlikely to move it one way or the other.
The sale of consumer and milk powder businesses in South America last year - as part of a joint venture agreement with Nestle - netted Fonterra about $230 million and will ensure there is no repeat of last year's $50 million loss.
That loss was attributed to a decision by directors to stick to the promised payout of $5.30/kg of milk solids. This year the payout has been slashed to reflect negative world market conditions - the low commodity price and rising Kiwi dollar.
But, despite the tough market, there are likely to be positives to look for in the result, one industry watcher said.
There had been record sales by volume this year and the merger savings were still ahead of target, , he said. That should have allowed the company to reduce debt and put together a strong balance sheet.
