Fonterra says full-year earnings will be in ‘upper half’ of range

Fonterra is more optimistic about its full-year earnings.

Fonterra Co-operative Group is more optimistic about its full-year earnings and has lifted its forecast milk collection.

The New Zealand Exchange-listed (NZX) dairy giant said its forecast earnings for the current financial year will be in the “upper half” of the 40c-to-60c range per share.

Preliminary results showed it had a strong first half, said chief executive Miles Hurrell.

Prices slipped 0.6% in this week’s Global Dairy Trade auction.

Whole milk powder has the biggest impact on Fonterra’s farmgate milk price, which dipped 0.2% to an average of US$4153/MT (NZ$7205).

This is after a 4.1% jump two weeks ago and a 5% lift at the event before that.

Fonterra expects to pay farmers between $9.50 and $10.50 per kilogram of milksolids for the 2024-25 season.

On Friday, the co-op also revised its forecast milk collections up to 1510 million kgMS after favourable weather.

“We can see we’ve maintained the momentum from 1Q,” Hurrell said.

“Further to this, good pasture growth across most of New Zealand to date has meant our forecast collections for the season are up.”

Hurrell said Fonterra’s revised dividend policy was 60-80% of full-year earnings, with up to 50% of the full-year dividend paid at interims.

Fonterra is due to announce its first-half result for the six months to January 31 on March 20.