- Fonterra (FSF) has recorded a big earnings boost for the nine months up to April 30, despite the COVID-19 pandemic
- The company said its financials were affected by coronavirus, but still managed to produce substantially improved results over the period
- Total earnings before interest and tax (EBIT) grew to $1.1 billion, up from $378 million
- Meanwhile, the company’s net cash flow went up $1.4 billion to $698 million
- Fonterra shares closed 2.06 per cent lower on Friday, trading for $3.33 per share.
Fonterra (FSF) has recorded a big earnings boost for the nine months up to April 30, despite the COVID-19 pandemic.
The company’s total earnings before interest and tax (EBIT) grew to $1.1 billion, up from $378 million the year before.
Fonterra’s net cash flow was also up some $1.4 billion, to $698 million.
They also constricted net debt to $5.7 billion, down from $7.4 billion the year before.
The company said that the coronavirus had injected a fair degree of uncertainty into the global dairy market, despite the company’s impressive earnings boost.
This is especially true for the New Zealand dairy Co-op, who export 95 per cent of their products.
Fonterra has, however, stated that due to nature of their export markets, they are used to a degree of uncertainty and turbulence even in normal operating circumstances.
This is why the company contracts the majority of its milk supply, a policy it continued this year and why the milk products the company offers have largely stayed stable.
The company’s foodservice business was the most affected by the virus, but still grew EBIT 54 per cent for the quarter. In the Chinese export market, the company saw sales fall in February but had fought back by March.
Fonterra is still seeing the effects of corona on its business segments in Oceania, South East Asia and Latin America.
The CEO of Fonterra, Miles Hurrell, said that despite COVID-19 challenges, the co-operatives total group normalised earnings before interest and tax (EBIT) for the nine months to April 30 was $815 million, an increase of $301 million on this last time last year, an increase of $301 million on this time last year.
“The work done over the last year to strengthen our balance sheet, and the Co-op’s ability to respond quickly has helped us manage the COVID-19 situation over the last few months. We’re drawing on our global supply chains and diverse product and customer base to minimise disruptions for our customers and our business,” Miles stated.
“COVID-19 has affected virtually every country, market and industry, and as a result the global diary market is volatile, and the outlook is uncertain” he commented.
Fonterra shares closed 2.06 per cent lower on Friday, trading for $3.33 per share.