Fonterra lifts forecast payout sharply
Fonterra has announced a payout
before
retentions for the coming season of $6.90-$7.10/kg milksolids (MS) but
has indicated that if favourable conditions remain this could rise to
over $8/kg MS.
A milk price of $6.60/kg MS and distributable
profit of 30-50c/share is being forecast.
Chairman Sir Henry
van der Heyden said this represented an increase of 50c on the forecast milk
price for
the current season, but an updated forecast
will follow
its annual budgeting process in late July. The current forecast will see retentions from the distributable profit of 25-35 percent.
If international dairy prices and
foreign
exchange rates remain at current levels for most of the coming
year, it was possible the 2010/11 payout could be well over $8/kg.
The $6.90-7.10 payout reflected a more cautious
outlook
given the high degree of volatility in the market.
"... farmers doing their budgets for the
coming season should base their planning around a payout broadly in line
with
this year," he said.
The co-op's fair value share (FVS)
price for 2010/11 is to remain at $4.52/share. In November last year,
shareholders voted to move to a
restricted market value range with the independent valuer, Grant
Samuel, determining the value range of $3.95-$4.58/share with a
mid-point of
$4.27. This represents an 11.5 percent increase on the value range
mid-point of $3.83 estimated in December.
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