Tuesday 24th March 2009 |
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Debt gearing increased to 61.5% at January 31 from 57.4% at July 31, the Auckland-based company said in a statement. Gearing will ease back to "more normal levels" by the end of the year as it freezes non-essential capital spending and requires less working capital. Total borrowings rose to $8.1 billion as at January 31, from $6 billion a year earlier.
The cooperative kept its milk payment forecast unchanged at $5.10 a kilogram, having slashed the estimated payment from last year's record $7.90 to reflect a drop in world prices. Fonterra changed its balance date and its first-half results aren't directly comparable.
Sales in the six months ended Jan. 31 rose 9.6% to $8 billion from $7.3 billion of revenue in the six months ended Nov.30, 2007. Adjusting for timing differences and including currency hedges, sales fell 7.6%, it said.
Fonterra is "in reasonable shape given the turmoil in the world economy - it's a tough time for everyone and Fonterra is no exception," chairman Henry van der Heyden said.
Total payments to farmers will sink to about $6 billion this season from $9.4 billion last season.
Global prices for dairy products have tumbled 57% from the record highs in the past 15 months, according to Bloomberg.
Fonterra's commodities and ingredients business lifted sales by 2% to $5 billion in the first half. Revenue in Australia and New Zealand gained 12% TO $1.5 billion, Asia/Middle East/Africa rose 53% to $1.2 billion and sales in Latin America advanced 12% to $358 million.
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