Fonterra hikes 2023 earnings forecast

 New Zealand's Fonterra Co-operative Group on Friday raised its earnings forecast for fiscal 2023, citing strong demand and higher prices for its milk products, and said it expects a further boost if favourable conditions persist, reported Reuters. 

The world's biggest dairy exporter said it now expects to earn between 45 and 60 New Zealand cents per share in the financial year ending July 2023, compared with an earlier estimate of 30 to 45 cents.

Sustained period of favourable pricing for its protein and cheese portfolios as well as whole milk powder is the main driver behind the FY23 earnings guidance boost, Fonterra Chief Executive Officer Miles Hurrell said. 

"If these unprecedented conditions were to continue for a further extended period, this could have an additional positive impact on forecast earnings," Hurrell added.

Fonterra on September 22 is expected to report fiscal 2022 earnings at the top end of its guidance range of 25 to 35 NZ cents per share, compared with 34 NZ cents in 2021.

The Auckland-based firm, however, lowered its milk collections forecast for the 2022-23 season to 1,495 million kilogram of milk solids (kgMS) from 1,510 million kgMS, as adverse weather conditions in parts of the country impacted collection and resulted in a slow start to the season.

Source: Reuters