21 May 2020

Fonterra third quarter earnings rise to $815m

10:03 am on 21 May 2020

Fonterra has announced an increase in third quarter earnings before tax of $301 million to $815m, despite the challenges from Covid-19.

However the dairy cooperative has lowered its forecast payout to farmers for the season.

Fonterra milk truck

Photo: RNZ / Rebekah Parsons-King

Chief executive Miles Hurrell said all three business units have delivered a good performance for the year to date, despite the negative impact of the coronavirus pandemic on its food service business.

Earnings for that sector rose by 9 percent on this time last year to $615m.

The ingredient business was up 54 percent and the consumer business benefited from a spike in sales as people stockpiled food.

The dairy cooperative is forecasting a payout for the season about to end of $7.10 to 7.30 per kilo of milk solids, down from an earlier forecast of $7 to $7.60.

The final number will be unveiled later this year.

Next year's outlook is worse for farmers, with the forecast at $5.40 to $6.90 per kilo of milk solids.