Fonterra takes large profit hit, down 36 per cent

Fonterra takes large profit hit, down 36 per cent

The company was expecting to make the announcement in April but has brought it forward to avoid speculation.

Massive changes across the Tasman at Fonterra, New Zealand's largest company, which revealed a massive write down on a controversial Chinese investment, a net $348 million loss for the six months to January 31, and the looming departure of CEO, Theo Spierings.

Dutch-born Spierings noted that he is at the outside of the usual CEO tenure of five to seven years, having taken the role in 2011.

In an interview with the Herald past year, he said he wasn't looking to move on just yet, saying, "I have seen many CEOs who have been in companies like Fonterra for a very long time". I look forward to new challenges, but right now my focus is on Fonterra. "That will be the case until I finish with the co-operative", he added.

But in its interim results relases today, Fonterra said net normalised profit after tax had fallen 36 per cent from its 2017 result, to $248 million.

Synlait said earnings in the second half would not be as strong as it spends more on research and development, but it continued to forecast robust overall earnings growth for the full year.

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He was concerned however about the safety of English fans and the ability of the British embassy and consular services to protect them.

The company said it had written down the value of its investment in Beingmate by $405 million to $244m.

Wilson said, "While we appreciate the substantial opportunity and privilege of our business in China, our shareholders and unitholders will be rightfully disappointed with this outcome. The turnaround of the investment is a key priority for our senior management team", Wilson said in a statement to the ASX and NZX yesterday.

In relation to Beingmate Mr Coull noted that while the Council viewed the latest impairment as reflective of the reality of the situation he understood Farmers' frustrations with what the Council has described as an unacceptable situation.

This comes off the back of a huge payout from Fonterra to Danone late past year.

The result also accounted for the $183 million settlement to French food company Danone after Fonterra's precautionary recall of whey protein in August 2013.

Wilson says the Board will decide how the Beingmate impairment and the Danone payment will be treated for final dividend purposes after the end of the financial year when it will have the full picture of Fonterra's operating performance.

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