- Total group revenue: NZ$23.4 billion, up 11%;
- Normalized profit after tax: NZ$591 million, up 1%;
- Group total normalized EBIT: NZ$991 million, up 4%;
- Net debt: NZ$5.3 billion, up NZ$1 billion;
- Normalized earnings per share: 35 c/share, up 1 cent;
- Final farm gate milk price 2021/22: NZ$9.30 per kgDM;
- Milk collections: 1,478 million kgDM, down 4%; and
- FY23 outlook: 2022/23 forecast Farm gate milk price range of NZ$8.50 to NZ$10.00 per kgDM, with a midpoint of NZ$9.25 per kgDM. Forecast for 2022/23 normalized earnings guidance range of 45 to 60 cents per share.
“These results demonstrate that our decisions around product mix, market diversification, quality products and supply chain resilience mean the co-op is able to deliver both a strong milk price and strong financial performance in a challenging global operating environment,” Hurrell said. .
When releasing its FY21 results, the co-op said it was looking to offload its Australian operations as it entered an asset valuation phase. Its Chilean operations Sorpole and Prolesur have also been put up for sale.
In Australia, Fonterra owns the Western Star Butter, Perfect Italiano and Mainland Cheese brands, as well as a license to produce certain Bega-branded products.
Hurrell said the sale of the Soprole business was “making progress”, despite reports of protests at its Chilean factory earlier this month.
“One year on, the co-op is making tangible progress against our strategy – to focus on New Zealand milk, to be a leader in sustainability and a leader in innovation and dairy science.
“We have considered a number of options for our Australian business and have decided that it is in the interests of the co-op to retain full ownership.
“Australia plays an important role in our consumer strategy with a number of common and complementary brands and products and as a destination for our New Zealand dairy solids. The business is doing well and will play a key role in helping us achieve our 2030 strategic goals,” said Hurrell.
The main objective for 2030 is a return of approximately $1 billion for shareholders and unitholders.
Total group revenue increased by $2.3 billion to $23.4 billion due to higher product prices, but sales volumes declined in FY22 in due to short-term changes in demand and ongoing disruptions to shipping and supply.
Although there were strong margins in the ingredients channel, the total gross margin declined due to the higher cost of milk in the restaurant and consumer channels.
“A series of geopolitical and economic events also impacted our performance, including an unfavorable revaluation of NZ$80 million of the cooperative’s Sri Lankan trade debts, due to the devaluation of the rupee.
“Our normalized profit after tax of NZ$591 million was up 1% from last year, due to higher profits.
There was a “mixed performance” in its three regional markets:
Africa, Middle East, Europe, North Asia and Americas (AMENA) Normalized EBIT was NZ$527 million, up 57%, due to the improvement in the gross margin of its Ingredients channel.
Asia Pacific (APAC) Normalized EBIT was NZ$237 million, down 22%, as improved APAC ingredients channel performance was more than offset by somewhat weaker consumption and restoration channels.
Greater China Normalized EBIT was NZ$432 million, up 7%, with improved performance in its ingredients chain partially offset by lower margins in food service chains and consumption, due to the rising cost of milk.