Fonterra has raised its full-year EPS guidance as the New Zealand-based dairy giant kicks off a marketing exercise for the disposal of its consumer-facing business.
The dairy cooperative is now expecting to deliver earnings per share of 55-75 New Zealand cents, up from an earlier forecast of 40-60 cents. Interim results will be issued on 20 March.
Fonterra CEO Miles Hurrell said in a statement today (10 March) that it is “pleasing to see the Co-op delivering strong earnings performance”, along with a NZ$10 ($5.74) per kgMS forecast Farmgate Milk Price midpoint, “which is a great outcome for farmer shareholders”.
Hurrell added: “This upgrade reflects the underlying strength of our core ingredients business and the resilience in our consumer channel, which is contributing to a robust result for businesses in the divestment perimeter.”
In a separate statement, Fonterra announced that it has commenced roadshow meetings with “potential” investors as part of the divestment process for its global consumer and associated businesses.
The disposal plans were announced in May last year.
Meetings will take place in New Zealand, Australia and Asia, and mark a step toward a potential IPO or an alternative sale process as Fonterra seeks to focus on its dairy ingredients business instead.
The consumer-facing business will become Mainland Group post-transaction. The CEO-elect of that business, René Dedoncker, and CFO-elect Paul Victor, will lead the roadshow proceedings, the Anchor butter and Mammoth flavoured milk drinks brand owner said.
While the consumer-facing business will be divested, Fonterra plans to retain a manufacturing facility in Saudi Arabia and its Greater China consumer operation.
Hurrell said the meetings are an “important step in the process of testing the merits and value of an IPO, which the Co-op is exploring as a divestment option alongside a trade sale”.
The company added that “a divestment remains subject to approval from Fonterra’s farmer shareholders”.
