Sharechat Logo

Fonterra slashes share price by 20% amid global turmoil

Friday 12th December 2008

Text too small?
Fonterra Cooperative Group, the world's biggest dairy exporter, cut its share price by about 20%, citing "unprecedented" turmoil in equity markets and a "difficult" global economic outlook.

Fonterra, as a cooperative owned by its farmers, requires its owners to hold shares in proportion to their milk production. The estimated Fair Value Share price for the 2009/2010 was set at $4.47, down from this season's price of $5.57, it said in a statement today.

The share price is set annually, based on an estimated range provided by valuer Duff & Phelps. The firm assessed the valuation range at $4.14 to $4.80 and the set price is the mid-point of the range, chairman Henry van der Heyden said.

The valuation reflected "the sharp decline in share values around the world and the related global credit crunch, which has restricted access to and increased the cost of capital," van der Heyden said. The weaker New Zealand dollar was a mitigating factor, he said.

The valuation also assumes a full write-off of Fonterra's stake in disgraced Chinese milk company San Lu.

Fonterra last month cut its forecast payment to farmers after a 24% slide in global prices for dairy products and the write-off of San Lu.

The revised forecast is for $6 a kilogram of milk solids for the 2008/2009 season, down 60 cents from the previous estimate in September.

Dairy prices have joined a broad downturn in commodities on speculation the slowing global economy needs less raw materials, fuel and food.

By Jonathan Underhill



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

30th November 2021 Morning Report
Serko Limited (NZX: SKO) Announces Opening of NZ$10 Million Retail Offer
Rua Bioscience Limited (NZX: RUA) Rua to Accelerate Growth with Proposed Acquisition of Zalm
The New Zealand Refining Company Limited (NZX: NZR) Successfully Completes Placement
NZME Limited (NZX: NZM) Acquires BusinessDesk to Supercharge Digital Growth
Cannasouth Limited (NZX: CBD) Acquisition of Outstanding Stake in Cultivation JV Complete
Geneva Finance Limited (NZX: GFL) Half Year Results
The New Zealand Refining Company Limited (NZX: NZR) NZ announces equity raising
Asset Plus Limited (NZX: APL) Result for the six months ended 30 September 2021
Me Today Limited (NZX: MEE) 30 September 21 Results and Conditional Placement