Fonterra delays financial results – confirms job losses

New Zealand dairy giant Fonterra has delayed reporting audited financial results for its 2018/19 financial year.

Last week, the farmer-owned co-op announced that it was postponing the announcement of its 2018/19 financial results by more than two weeks until the end of September.

Fonterra recently dropped the value of several of its assets in Brazil, Australia, New Zealand and China to the tune of €475m to €500m (NZ$820m to NZ$860m).

The co-op said it was forced to delay reporting full year results as its auditors, PWC, were still working on adjusting the value of these assets.

Fonterra also confirmed that it will incur financial losses of between €340m to €390m (NZ$590m to NZ$675m) for its 2019 financial year following the write-down of these assets. As a result, the co-op will not make a dividend payment to its farmers.

The suspension of the 2019 dividend will be a blow to Fonterra’s farmer suppliers. A dividend in the range of 10c to 15c per share would have seen the co-op pay out between €93m and €140m to its shareholders.

In previous years, the co-op’s dividend has been as high as 40c per share, which would mean a dividend payment of more than €37,000 to the average Fonterra farmer.

Meanwhile, the co-op also confirmed it will cut jobs in the coming months in a bid to reduce costs. The co-op has not given a definitive figure on the number of jobs at risk but it is expected to be a large number.