Fonterra pleased with annual results

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It has been a busy week for Fonterra, with the co-op not only announcing its annual results but also its plans for the next decade.

The co-op was pleased with its 2021 results, especially when Covid-19 and all its flow-on effects were taken into account, Managing Director for Co-operative Affairs at Fonterra, Mike Cronin said.

"I think what it shows is the co-operation between farmers and the people who work with us. [They're] are all working together to reset the business and strengthen the balance sheet," Cronin told The Country Sport Breakfast's Brian Kelly.

The co-op's milk price was at $7.54 and the average was up for the season.

Fonterra's earnings were also looking good, Cronin said.

"We had a forecast range of 25 to 35 cents per share during the year and we ended at the top end of that earnings range at 34 cents."

As a result, Fonterra had delivered a total dividend for the year of 20 cents, Cronin said.

As for the milk price, the co-op started the year at an opening forecast price of $6.15.

To finish the year at $7.54 and put $11.6 billion back into the New Zealand economy was a great effort, Cronin said.

"I think we can feel pretty pleased about that."

Meanwhile, Fonterra's long-term strategy will give a taste of what the next decade will look like for the co-op.

The long-term strategy focused on three key themes that were important to Fonterra as it looked to 2030, Cronin said.

"We're going to focus on New Zealand milk, we're going to lead in sustainability and lead in dairy innovation and science."

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The co-op had set some strong targets and ambitions to achieve by FY30, starting with a continued lift in the milk price, to around the $6.50 - $7.50 range.

Fonterra aimed to improve its operating earnings (EBIT) by 40 to 50 per cent over that time, which would put it in a position to be able to pay sustained strong dividends.

The co-op had also laid out plans to sell assets in Chile and Australia, and $1 billion was planned to be invested in sustainability measures by 2030, Cronin said.

"So there's a whole lot of really good things that this is going to deliver over that time."

Also in today's interview: Cronin explained how next week's farmer roadshows will run, with Auckland's current Covid-19 restrictions.