January 29, 2008

Fonterra revenue surge by US$853m for 6 months

Fonterra Co-operative Group increased its half year revenues by US$853 million to achieve total revenues of US$7.3 billion in the six months to November 30, 2007.

The strong sales was attributed to record commodity prices, improved returns from the sale of ingredients and branded dairy products.

The result saw Fonterra completing the first half of the season with US$4.5 billion available for payout to suppliers, compared to US$2 billion in the comparable prior period.

Henry van der Heyden, Fonterra chairman, said the result reflected higher prevailing prices in a market where supply had been tight.

Van der Heyden explained that the selling prices achieved in the first half more than offset the higher average exchange rate of 75 cents. At the same time, the company saw steady increases in the returns from equity investments.

Despite cold wet conditions in some North Island regions ahead of the peak, Fonterra's suppliers achieved a 2.5 per cent increase in production over the same period last season.

The higher milk price means Fonterra's total cost of goods sold, including payout to suppliers, was US$1 billion ahead of the comparable period at US$6.4 billion.

However total operating expenses were US$841 million for the six months ended November 30 2007, compared to US$860 million in the prior year.

Fonterra is owned by approximately twelve thousand farmers throughout the country and is the fifth-largest dairy company in the world.