Fonterra lifts 2010/11 forecast payout 10c

Tuesday 24th May 2011

Dairy cooperative Fonterra has lifted its forecast payout 10c to a new record of $8 to $8.10, before retentions, for 2010/11.

It has also announced an opening forecast payout range before retentions of $7.15 to $7.25 for the season starting on June 1.

The lower opening forecast payout reflected an outlook for a higher average exchange rate and potentially moderating commodity prices, Fonterra said today.

The opening forecast payout range including an opening forecast milk price of 6.75 per kg of milksolids (kgMS) and forecast distributable profit range of 40c to 50c per share.

The 10c rise was due to a 10c per share rise in Fonterra's forecast profitability, while the forecast milk price was unchanged at $7.50 per kgMS.

Distributable profit was forecast to be in a range between $690m and $830m, equating to 50c to 60c per share.

As a consequence, a 100% share-backed farmer was forecast to earn on average the payout in the range between $8 and $8.10 before retentions, up 10c on the previous forecast, and $7.75-$7.80 on a cash basis, unchanged from the previous forecast.

The final payout would be confirmed when Fonterra announced its annual financial results in late September. If confirmed within the forecast range, it would represent a new record for Fonterra - exceeding the $7.90 before retentions and $7.66, on a cash basis, achieved in 2007/08.

NZPA

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