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UPDATE 1-NZ's Fonterra half-year profit jumps 43% on higher global dairy prices

UPDATE 1-NZ's Fonterra half-year profit jumps 43% on higher global dairy prices

· 03/16/2021 16:21
UPDATE 1-NZ's Fonterra half-year profit jumps 43% on higher global dairy prices

Adds forecast, details on China sales

- New Zealand's Fonterra FCG.NZ on Wednesday posted a 43% rise in half-year adjusted profit, helped by strong demand in China as pandemic-related restrictions eased and on higher global dairy prices.

The company posted a normalised profit after tax of NZ$418 million for the six months ended Jan. 31, up from NZ$293 million ($212.92 million) a year earlier.

Half-year earnings before interest and taxes from Greater China rose 38% to NZ$339 million, lifted by robust performance of the Foodservice and Consumer businesses.

The dairy exporter said it also benefited from the divestment of its DFE Pharma and foodspring businesses, and reiterated its full-year forecast for normalised earnings of between 25 and 35 cents per share.

The company, however, warned of pressure from rising raw milk prices on its sales margins. Global dairy prices have surged more than 36%, compared with rates in mid-June last year.

Fonterra also declared an interim dividend of 5 cents per share, having decided against declaring any dividends for the same period last year.

The company also re-affirmed the price forecast for what it pays farmers for milk to between NZ$7.30 and NZ$7.90 per kilogram of milk solids (kgMS) for 2021.

($1 = 1.3761 New Zealand dollars)


(Reporting by Soumyajit Saha in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila)