Fonterra: half-year report makes up for media release

By Alan Robb

Thursday 5th February 2004

Fonterrra's shareholders were poorly served by the interim report released to the NZX and media on January 28 (NBR, Jan 30). That is now made up for by the good quality of the half-year report on its website and mailed out to members.

The 17-page half-year report contains statements of financial performance, movements in equity, financial position, and cash flows, as well as an extensive discussion of the results.

It is comprehensive, clearly presented and informative.

In contrast, the January release, which followed the NZX's minimum disclosure requirements, focused on selected revenue and expense figures but did not provide complete reports of financial performance, financial position and cash flows.

It does not matter if an entity is an investor-owned company or a co-operative. Members need information about profitability, cash flows and financial position if they are to judge how satisfactorily the business has performed. Co-operatives rise or fall for the same reasons as other businesses. It has been said that the ultimate bottom line in business is the ability to make a profit, turn it into cash and to do that repeatedly. To see whether Fonterra is doing well at that, its members should discount Andrew Ferrier's claim that evaluating a co-operative is different.

The NZX could also improve its reporting requirements so that all companies provide more information in the announcements they are required to make.

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