24 Turning agritech strategy into reality Vol 19 No 36, September 21, 2020
farmersweekly.co.nz
$3.95
Incl GST
Fonterra’s looking good Hugh Stringleman
F
hugh.stringleman@globalhq.co.nz
ONTERRA made a welcome return to profitability in the 2020 financial year, despite the global disruption of covid-19 and the directors were able to make a modest 5c a share dividend. Chair John Monaghan says the company was match fit when covid hit having divested Tip Top and DFE Pharma for good prices beforehand. When those abnormal gains of 32c were deducted, 11c a share was available for dividend and the directors opted to pay out 40% at the lower end of their policy range. For the first time in several years, Fonterra declared a retention of 38c a share. Monaghan says the board had an option to pay a special dividend from asset sales in future. When the covid-19 pandemic erupted Fonterra stayed firm on its new core strategy and was able to be agile and profitable, he said. Fonterra will pay out $80
million on 1.7 billion shares and units on October 15 but with no imputation credit. Resident withholding tax will be deducted at 33%, or 1.65c/share. Monaghan says distributing a 5c dividend was a prudent decision in the context of so much covid-19 uncertainty. “We haven’t yet reached our debt target and we are still in a sales process for China Farms,” he said. “It is a decision that balances our aims of further reducing debt and distributing earnings. “We expect to continue to pay dividends in the future, assuming normal operating conditions.” Coupled with the confirmed $7.14/kg milksolids farm gate milk price, fully shared farmersuppliers will receive $7.19 for the 2020 season. It is the fourth-best seasonal final payout in the co-operative’s 20-year history. Chief executive Miles Hurrell says the conservative 5c dividend for 2020 was a reflection of the unprecedented situation regarding the covid-19 pandemic. “We still are in a debt repayment requirement so hence the need for a conservative dividend,” he said.
FAR_09830
FARMLANDS DELIVERS A STORE FULL OF KNOWLEDGE Fert, chem, seed and feed — Farmlands has the brands and the expertise to help you achieve greater success this spring. Talk to us today. farmlands.co.nz | 0800 200 600
Drought-proof future IN A continuing feature looking at New Zealand farming’s response to climate change, Richard Rennie spoke to AgResearch scientist Dr Shannon Clarke about her work in a new field
“We increased our profit after tax by more than $1bn, reduced our debt by more than $1bn and this has put us in a position to start paying dividends again.” “I am proud of how farmers and employees have come together to deliver these strong results in a challenging environment.” Monaghan and the farmerdirectors will present 30 farmer roadshows this week assisted by the regional managers because the Auckland head office team is prevented from travelling.
of genetics that will help develop livestock and forages more resilient to climate stress. Photo: Sharron Bennett MORE: Read the full story P12.
He is standing down at the annual meeting on November 5 after two years as chair and 12 years as a director and Peter McBride has been nominated as chair-elect. Monaghan says his two years in the chair had been tumultuous and that he would retire from the board knowing the co-operative had returned to good health. “When there is a big task ahead you need to put your head down and get on with it, ignoring the barking dogs,” he said.
I am proud of how farmers and employees have come together to deliver these strong results in a challenging environment. Miles Hurrell Fonterra chief executive