By PHILIPPA STEVENSON
Fonterra has raised its estimated share price by 10c to $3.95 a share for the new dairy season starting in June.
The dairy co-operative, whose 13,000 farmer shareholders hold all of its more than $1.1 billion worth of shares, has continued the conservative stance it took when setting its
share price for the first time last year.
Fonterra directors choose the price from within a range determined by independent valuer Standard & Poor's.
The present season's price of $3.85 is just below the $3.95 mid-point of the Standard & Poor's range for the year, and the new season's price will be slightly below the new estimate mid-point of $3.99.
The final share price will be set before June 1, the start of the dairy season when most dairy farm and herd transactions occur.
Fonterra chairman Henry van der Heyden said the improved valuation reflected the success of Fonterra's business strategy in a difficult environment. It also showed the valuer's confidence in Fonterra's ability to deliver good returns for shareholders in the future.
The Standard & Poor's report identified factors that had a positive effect on the value of Fonterra's business, he said.
They included the continued capture of merger benefits, synergies from the reorganisation of the group's Australian investments, the gains from joint ventures and new products, and the continued successes of value-added activities.
Standard & Poor's said the moves had offset external detractions, such as the appreciation of the New Zealand dollar and a weaker global economy.
Farmers hold one share for each kilogram of milksolids they supply to Fonterra.
