Fonterra announced receiving significant interest from potential buyers
Source: The DairyNews
Fonterra announced receiving significant interest from potential buyers for its consumer and associated businesses. The announcement comes as part of Fonterra's strategic reassessment and intent to divest, either fully or partially, these segments, which include popular brands like Anchor, Mainland, Kapiti, and Perfect Italiano.
According to Fonterra's Chief Executive, Miles Hurrell, it's still early in the divestment process, but the cooperative is committed to keeping stakeholders, including farmer shareholders, unit holders, employees, and the market, informed about progress and developments. "We are also progressing work on our upd ated strategy and expect to share more details in the coming months," Hurrell added.
The consumer and associated businesses, which encompass Fonterra Oceania and Fonterra Sri Lanka, utilized about 15% of the co-op’s total milk solids and accounted for approximately 19% of Fonterra’s group operating earnings in the first half of the 2024 financial year. This significant portion underscores the strategic importance of these segments in Fonterra's portfolio.
Hurrell discussed the divestment during the cooperative's third-quarter results announcement. "Following our strategic shift announcement earlier this month, we have seen a high volume of interest from entities keen on the potential divestment of our consumer businesses," he stated.
In addition to the divestment news, Fonterra reported a profit after tax from continuing operations of $1 billion, an increase of $20 million from the previous year, equating to 61 cents per share. The strong financial performance, driven by robust earnings across all product channels, has led Fonterra to raise its FY24 earnings forecast for continuing operations to 60-70 cents per share, up from 50-65 cents per share.
Moreover, Fonterra has maintained its forecast for the current season's Farmgate Milk Price at a midpoint of $7.80 per kgMS, with a narrowed range of $7.70-$7.90 per kgMS. For the upcoming season starting June 1, the cooperative has se t a forecast range of $7.25 to $8.25 per kgMS, with a midpoint of $8 per kgMS.
The consumer and associated businesses, which encompass Fonterra Oceania and Fonterra Sri Lanka, utilized about 15% of the co-op’s total milk solids and accounted for approximately 19% of Fonterra’s group operating earnings in the first half of the 2024 financial year. This significant portion underscores the strategic importance of these segments in Fonterra's portfolio.
Hurrell discussed the divestment during the cooperative's third-quarter results announcement. "Following our strategic shift announcement earlier this month, we have seen a high volume of interest from entities keen on the potential divestment of our consumer businesses," he stated.
In addition to the divestment news, Fonterra reported a profit after tax from continuing operations of $1 billion, an increase of $20 million from the previous year, equating to 61 cents per share. The strong financial performance, driven by robust earnings across all product channels, has led Fonterra to raise its FY24 earnings forecast for continuing operations to 60-70 cents per share, up from 50-65 cents per share.
Moreover, Fonterra has maintained its forecast for the current season's Farmgate Milk Price at a midpoint of $7.80 per kgMS, with a narrowed range of $7.70-$7.90 per kgMS. For the upcoming season starting June 1, the cooperative has se t a forecast range of $7.25 to $8.25 per kgMS, with a midpoint of $8 per kgMS.
