Emerging markets boosted Fonterra’s first-half results, the New Zealand dairy giant said today (27 March) but CEO Theo Spierings cautioned demand in Asia was slowing.
Fonterra booked a 33% rise in net profit in the six months to the end of January. Sales were up 8%, partly driven by growing demand from Asia and Latin America.
However, Spierings said the group was already seeing demand drop in Asia.
He also warned competition was stepping up in Australia, while volatility on the commodities markets is expected to have a negative impact on product mix.
Nevertheless, the cooperative raised its forecast payout for the 2012/13 season to $6.12 for a fully shared-up farmer and narrowed its earnings per share guidance to 45-50 cents per share.
First-half net profit increased 33% to NZ$459m (US$383.5m). Normalised operating profit, adjusted for the NZ$24m cost of closing its Cororooke plant, rose 26% to NZ$693m.
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The company said gains were driven by a “strong” performance from its New Zealand dairy products unit, which increased volumes and improved margins, as well as growing demand from Asia and Latin America.
Milk volumes collected from Fonterra’s farmer-shareholders rose 6% in the period and sales were up 8% to 2.1m metric tonnes.
Click here for our interview at Fonterra’s press conference in Auckland with CFO Jonathan Mason.