Dairy giant Fonterra's profits set to fall
2013-07-30 10:20:30
New Zealand dairy co-operative, Fonterra, has forecast a downgrade in profits this financial year.
Fonterra's blaming the drought in New Zealand, and the cost of restructuring dairy operations in Australia for the $70 million fall in full-year earnings, since it reported in the Shareholder Fund Prospectus.
The dairy company, one of the world's largest, is now expecting full year profits at $873 million in earnings before interest and tax (EBIT).
The drought forced whole milk powder prices to rise by 64 per cent.
"At the same time, our Australian business remains under pressure," Fonterra chief executive Theo Spierings said.
"Although a recovery plan is being implemented, it is in its early stages and will not counteract the impact on earnings of intense competition and the accelerated reshaping of our business. The reshape programme has resulted in a number of additional write-offs."
He says the revised down figure is still subject to a volatile market, and may be revised further.