Fonterra's Chilean company Soprole has lifted its 2021 earnings. Photo / NZME
Fonterra's Chilean company Soprole has lifted its 2021 earnings. Photo / NZME
Chilean food group Soprole, which Fonterra has put up for sale, more than doubled its net profit in 2021 as a result of its merger with milk processor Prolesur, the company said in its annual report.
Soprole's profit was 54.25 billion Chilean pesos ($98.7m) in the year compared to CLP22.5billion in 2020, the report shows.
"However, this difference, which is significantly higher than the one already explained and generated in the company's operating business, is due to a benefit as a result of a corporate reorganisation with the merger of Soprole Inversiones and Sociedad Procesadora de Leche del Sur (Prolesur)," chairman Hugo Lalanne said in the report.
Prolesur was rolled into Soprole in March last year.
At an operating level, Soprole's earnings had recovered to historical levels and were 8 per cent higher than the average profit in the years 2015 to 2016, he said.
Soprole's 2020 profit signalled a reversal of a trend of declining earnings over the previous three.
Lalanne said the company had "recovered its innovative dynamics" in the year, reaching a record launch of 27 new products, exceeding those launched in 2020, 2019 and 2018.
Soprole had grown its milk intake at an average annual rate of 3.9 per cent over the past three years, while domestic production in the same period grew by just 1.4 per cent.
He said the 2021 performance fell within the framework of the three-year strategic plan, which he said aims to maintain, consolidate and deepen the company's leadership in the dairy market.
At its March interim result Fonterra said it was continuing to make progress on the divestment of its Chilean business and the ownership review of its Australian business.
"Both Soprole and Fonterra Australia are performing well and our priority is to maximise the value of both businesses to the Co-op," Fonterra CEO Miles Hurrell said then.
"We will take our time to ensure the best outcomes from these processes and remain confident on delivering on our intention to return around $1 billion of capital to our shareholders and unit holders by 2024, he said.
Fonterra's predecessor, the Dairy Board, bought a controlling stake in Soprole in 1986.
In 2008, Fonterra took its holding in Soprole, one of Chile's best-known brands, to a fraction under 100 per cent.
Kelvin Wickham, Fonterra's chief executive officer - Africa, Middle East, Europe, North Asia, Americas - serves on the Soprole board.
Early this month, The Australian aid there were "mutterings" in the market that Fonterra or its advisers have been discreetly approaching private equity firms to test their interest in the Australian arm, but that its attention was focused on Chile right now.
