Fonterra to miss earnings forecast
The world's biggest dairy exporter has missed its earnings forecast by more than 7 per cent.
Reports from New Zealand this morning revealed that Fonterra Cooperative Group would miss its forecast by about 7.3 per cent because of the drought in New Zealand and intense competition in Australia.
Earnings before interest, tax and one-time items would be about $NZ1 billion ($A869.94 million) in the year ending July 31, down from the $NZ1.079b forecast in its Shareholders' Fund Prospectus last year, the company said in a statement.
Last summer, New Zealand experienced the worst drought in the North Island for almost seven decades which had caused "unprecedented" volatility on its second-half earnings.
The company is reshaping its Australian business, which handles its consumer brands, in the face of weak consumer spending and aggressive competition.
"The drought has contributed to a 64 per cent rise in whole milk powder prices on GlobalDairyTrade since early 2013, and this had a temporary but significant negative impact on NZMP's margins," said chief executive Theo Spierings.
NZMP is Fonterra's marketing brand for its ingredients business.
The company expects to release its full earnings on September 25.
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