Dairy giant Fonterra has made the headlines this week after it announced a $348 million net loss and the news that Theo Spierings is stepping down as CEO.
Although Fonterra has posted a loss (the result of the Beingmate investment and Danone payout), the farmgate milk price has been raised from $6.40/kg of milk solids to $6.55/kg.
The Country's Rowena Duncum asked Fonterra chairman John Wilson if the increase in the farmgate milk price is a way of softening the blow for farmer shareholders?
Wilson says that although the business goes through volatility, Fonterra has a reasonably strong first half year, "so our normalised net profit after tax is the equivalent to about 15 cents per share or 248 million dollars. So on that basis we have announced an interim dividend of 10 cents."
For the full year to July 31, Fonterra forecast a total cash payout of $6.80 to $6.90.
The Beingmate investment has been a disappointment for Fonterra says Wilson, "but we've got to look across also that we have an integrated strategy in China of which Beingmate is a small - important - but a small part of."
Wilson says that Fonterra has no plans to drop Beingmate saying "we have a long term view around these assets" and that the Chinese company has very strong brand equity.
"We certainly do believe that transformation can occur within this organisation."
Today it was announced that Fonterra's CEO Theo Spierings is resigning. Wilson says this was a planned move and that the board has been talking about CEO succession for some time.
Read more: Fonterra CEO Theo Spierings to step down
"It's far too early to talk about Theo's legacy because he will be with us for some time as we work through this year until we're in a position to make an announcement and at that time we'll talk about the significant positive constructive impact that Theo has driven through this organisation, that is so different today than it was at the time Theo came into it."
Also in today's interview - John Wilson looks into the latest GlobalDairyTrade Auction result.