Divested part boosts Fonterra's profit

Fonterra has had a good first quarter, with nearly 6% higher profits, but this is entirely attributable to the activities that are going to Lactalis. Meanwhile, Fonterra lowers the milk price forecast for the current year by 50 cents per kilogram of fat and protein. Fonterra is implementing the reduction for two reasons: there is a lot of dairy supply on the world market, putting pressure on prices, and a larger own milk production is expected. The forecast is that during the current year 1.545 million kilos of 'milksolids' will be supplied, 20 million kilos more than previously expected. The expected payout price is being lowered from NZ $9 to $11 per kilogram of milksolids to NZ $9 to $10 per kilogram of milksolids. The midpoint price goes from NZ $10.00 to $9.50. So far, however, the business results are still good. The profit for the first quarter (from July) is higher than in the first quarter of last year and amounted to NZ $278 million, of which $158 million came from ongoing activities. The remaining NZ $120 million was earned by the Mainland Group, the collection of activities purchased by Lactalis. Notably, the profit from ongoing activities is NZ $10 million lower than in the same period last year, while the total profit for the first quarter of this year is actually $15 million higher. The sale of the Mainland Group is expected to be completed somewhere in the first half of 2026. Then an additional dividend of NZ $2 per share can also be distributed to the members/shareholders of Fonterra. The extra hurdle that still needs to be taken is a new vote by the members' council on this subject. Only then can there really be a cash out.