New Zealand's largest milk processor, Fonterra, has published accounts showing a €110m net loss after tax for the 2018 financial year. According to local media reports, this is the first loss in the co-op's 17-year history.
The bad result results from a combination of falling profitability, with Fonterra's EBIT falling by 22% in the past year, and exceptional charges related to its overseas partners.
The co-op wrote €247m off the value of its Chinese subsidiary, Beingmate, and paid Danone €131m in compensation for a past food safety scare.
Chief executive Miles Hurrell reported rising costs across the business, from an increase in the farmgate milk price late in the last season – which he said was good to co-op members – to other ingredient, development and support costs.
"There are no two ways about it. These results are disappointing," he wrote in Fonterra's annual report.
The bad result are a consequence of falling profitability and exceptional charges
Chair John Monaghan added that "Beingmate's unacceptable performance over the year has been frustrating".
Fonterra also faced the departure of both its former chief executive Theo Spierings and chair John Wilson in the past financial year.