New Zealand dairy giant Fonterra Cooperative has confirmed a 32% fall in its final payout to suppliers for the 2002/03 season, but forecast a modest lift in the coming season.

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Fonterra said its gross payout was NZ$3.63 (US$2.10) per kg of milksolids, 3 cents of which is retained to fund industry activities. The cooperative said the payout, which was much lower than $5.33 in the previous season, just exceeded forecasts, reported Reuters.

Acting chief executive officer, Jay Waldvogel, said Fonterra’s revenues, at $12.5bn, were down by $1.4bn for the season as a result of global commodity prices that were, on average, 24% lower than the previous season.

Fonterra said the appreciation of the New Zealand dollar had a direct impact on revenues, eroding them by $850m, although this was partially offset by hedging gains of $640m.

The company said it recorded a surplus of $284m, arising predominantly from sales of Latin American assets, and said this would not be distributed to shareholders but would instead be retained and used to fund new investments.

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Fonterra said it was $31m ahead of target this year in delivering annualised merger benefits, achieving $206m of the total $310m in benefits due to be captured by October 2004.

Chairman Henry van der Heyden said Fonterra continued to adopt $3.80 as its best estimate of payout for the 2003/04 season, although this would depend on global commodity prices and currency factors.

“Clearly our best opportunity to influence payout is to achieve another significant lift in underlying performance by continuing to drive for higher selling prices for commodities, and by continuing to reduce costs and deliver merger benefits,” he said.