- Total group revenue: NZ$23.4 billion, up 11%;
- Normalized profit after tax: NZ$591 million, up 1%;
- Group total normalized EBIT: NZ$991 million, up 4%;
- Net debt: NZ$5.3 billion, up NZ$1 billion;
- Normalized earnings per share: 35 c/share, up 1 cent;
- Final farm gate milk price 2021/22: NZ$9.30 per kgDM;
- Milk collections: 1,478 million kgDM, down 4%; and
- FY23 outlook: 2022/23 forecast Farm gate milk price range of NZ$8.50 to NZ$10.00 per kgDM, with a midpoint of NZ$9.25 per kgDM. Forecast for 2022/23 normalized earnings guidance range of 45 to 60 cents per share.
“These results show that the co-op is able to deliver both a strong milk price and a strong financial performance in a challenging global operating environment,” Hurrell said.
When it released its results for FY21, the co-op said it was looking to sell its Australian operations because it was now in a phase where it was valuing its assets. Sorpole and Prolesur, which are in Chile, have also been put up for sale.
In Australia, Fonterra owns the Western Star Butter, Perfect Italiano, and Mainland Cheese brands, and it also has a license to make some Bega-branded products.
Even though there were reports of protests at the Soprole factory in Chile earlier this month, Hurrell said that the sale of the business was “moving forward.”
“After a year, the co-op is making real progress on our strategy, which is to focus on New Zealand milk and be a leader in sustainability, innovation, and dairy science.
“We’ve thought about a number of options for our Australian business, and we’ve decided that full ownership is best for the co-op.
“Australia is an important part of our consumer strategy because we have a lot of brands and products in common with them and that go well together. It is also where we send our New Zealand dairy solids.” Hurrell said, “The business is doing well and will be a key part of helping us reach our strategic goals for 2030.”
The main goal for 2030 is to give shareholders and unitholders a return of about $1 billion.
Total group revenue went up by $2.3 billion to $23.4 billion because prices went up, but sales volume went down because of short-term changes in demand and ongoing problems with shipping and supply.
Even though there were strong margins in the ingredients channel, the higher cost of milk in the restaurant and consumer channels caused the total gross margin to go down.
“A number of political and economic events also had an effect on our performance. For example, the devaluation of the rupee led to an unfavourable revaluation of NZ$80 million of the cooperative’s Sri Lankan trade debts.
“Our normalized profit after taxes was NZ$591 million, which was 1% more than last year because our profits were higher.
In its three regional markets, it had a “mixed performance”:
Normalized EBIT for Africa, Middle East, Europe, North Asia, and the Americas (AMENA) was NZ$527 million, which was a 57% increase. This was because the gross margin of its Ingredients channel got better.
Normalized EBIT for Asia Pacific (APAC) was NZ$237 million, which was down 22%. This was because better performance in the APAC ingredients channel was more than offset by weaker performance in the consumption and restoration channels.
Greater China’s Normalized EBIT was NZ$432 million, which was a 7% increase. It was partially offset by lower margins in food service chains and consumption, which were caused by the rising price of milk.
