StockTalk

Maybe this announcement makes Fonterra worthy of its own thread...

https://www.nzx.com/announcements/431158

Interesting move.  Certainly boosted the SP yesterday.

Its the accounts silly ...  silly business over the accounts...

cows in sweden .. https://mydearsabrina.com/life-in-sweden/wonderfully-quirky-swedish-spring-tradition/

https://www.stuff.co.nz/nz-news/350292387/eys-pr-nightmare-secret-drinking-club-misconduct-allegations-and-resignations

Optimistic market update

https://www.nzx.com/announcements/431912

Q3 business update and FY25 Farmgate Milk Price

• Continuing operations'* earnings per share: 61 cents
• Reported earnings per share: 58 cents
• Continuing operations' profit after tax: NZ $1,013 million up $20m, or 2%
• Reported profit after tax: NZ $973 million down 27% with the prior period including Soprole performance and net gain on divestments
• Continuing operations' EBIT: NZ $1,440 million down 6%
• Return on Capital: 11.9% up from 11.7% year on year
• Lift in forecast FY24 continuing operations' earnings range: from 50-65 cents per share to 60-70 cents per share
• Opening forecast Farmgate Milk Price for 2024/25 season: $7.25-$8.75 per kgMS with a mid-point of $8.00 per kgMS
• Current season forecast Farmgate Milk Price: midpoint maintained at $7.80 per kgMS, range narrowed to $7.70-$7.90 per kgMS

CEO Miles Hurrell says the Co-op's Foodservice and Consumer channels in particular had a strong third quarter with a lift in earnings compared to the same time last year.

"As a result of this performance, we have lifted our forecast FY24 continuing operations' earnings range to 60-70 cents per share, up from 50-65 cents per share" says Mr Hurrell.

Fonterra also announced an opening 2024/25 season forecast Farmgate Milk Price of $7.25-8.75 per kgMS with a midpoint of $8.00 per kgMS.

Good news in the valleys and towns where the cows graze....

"$8.00 per kgMS."

If you live in the country its an invitation to meet at the local country cafe ... GRAZE...

Yes and lets hope the audit team has been on a strict low fat milk diet before taking out that pencil...

remember folks dont drink and audit ... not even after hours...

NZs largest company reported a good result and dividend, shares up strongly. I was expecting more insightful comment on this, and am interested to hear what the many talented stocktalkers have to say

Forecast 40-60cps fully imputed for 2025. Plus separation/sale of consumer brands worth an estimated $2 per share. On current pricing whats not to like, the market is starting to wake up and re-rate

Quote from: Habitz on Nov 14, 2024, 04:35 PMForecast 40-60cps fully imputed for 2025. Plus separation/sale of consumer brands worth an estimated $2 per share. On current pricing whats not to like, the market is starting to wake up and re-rate

I thought ze 'Vonterra Zhareholders Vund' vas ze 'added value' bit of Vonterra?  Thus vith ze consumer brands zold, there may be less 'added value' to add in ze vuture.  Zhort term, rising milk price at ze varm gate eez an increased eenput cost vor 'VZV'.  Vinds look to be blowing against VZV to me.

RB

Quote from: Red Baron on Nov 14, 2024, 07:23 PMI thought ze 'Vonterra Zhareholders Vund' vas ze 'added value' bit of Vonterra?  Thus vith ze consumer brands zold, there may be less 'added value' to add in ze vuture.  Zhort term, rising milk price at ze varm gate eez an increased eenput cost vor 'VZV'.  Vinds look to be blowing against VZV to me.

RB

and I zought zis column is about Fonterra not Vonterra, get vis ze game Baron hehe

Hurrell emphasized that this decision would help create a "simpler, higher performing Co-op" and allow Fonterra to allocate resources more efficiently to higher-return areas. While the sale is expected to impact earnings in the short term, Hurrell believes it aligns with the company's long-term strategy to enhance shareholder value.

It seems strange to me for them to sell them. Surely of anyone Fonterra should have the best ability to make these consumer goods at scale, which is the best way to make money on staples. What are the higher return areas anyway?

From yesterday's agm "higher value probiotics and proteins"

The consumer products businesses have experienced decreasing margins and increased capital demands according to Chairman Pete

16cps for Q1 fonterra has maintained fy25 guidance of 40 to 60 CPS fully imputed

From interest.co.nz report:

'A strong start'

Commenting on the first-quarter results for the co-op, Hurrell said it was strong start to the year, "especially when taking into consideration the higher cost of milk and narrower price relativities when compared to this time last year".

"While these factors have impacted our gross margins, this has been partially offset by improved product mix, with a greater allocation of milk to higher value products in our Foodservice and Consumer channels.

"We ended FY24 with well managed inventory levels, meaning we started this year with lower levels than the year prior.

"As a result, we have lower sales volumes in our Ingredients channel when compared to this time last year. This channel was also impacted by the continued narrowing of price relativities in New Zealand. This has been partially offset by the realignment of the Australian milk price with global commodity prices.

"While Foodservice and Consumer gross margins have been impacted by the higher cost of milk relative to Q1 last year, it is pleasing to see margins have improved in our global markets since the end of last financial year.

"Operating expenses for the first quarter of FY25 were in line with expectations as we continue to invest in core IT and digital infrastructure and transformation initiatives," Hurrell said.

CEO of the year, became CEO after the late theo speirrings left a mess

https://www.nzherald.co.nz/business/ceo-of-the-year-fonterras-miles-hurrell-wins-deloitte-top-200-individual-award/YUTYEEPZ4JBZXKUOJLWXA2CNEY/

Understatement of the year: "we had a few issues and we needed to lean into them quite quickly"

Yeah congrats to them...turned that ship around and good for NZ.

I regret not buying a few shares around $2 mark...been a good result for holders last couple of years...capital gains, capital return and increased divies...well done to holders.

here was his acceptance 8)  speech...lol

It's great that Fonterra has been identified as the cream of the crop. At times it felt like we have been milking the duck but there is no point crying over spilt milk and to finally become the big cheese of nz is a fantastic result for our team .

Theres a few divestments we need to butter up but we will be milking this award for all it's worth until the cows come home.
Thanks again for the recognition....we feel like the cat that got the cream.

Sorry if my post is a bit cheesy...but at least it's not dreary (dairy)

An upgrade.... good news for holders and farmers.

https://www.nzx.com/announcements/448080

Not many of us investing in / following FSF. Been on a bit of a tear following:

https://api.nzx.com/public/announcement/451558/attachment/443261/451558-443261.pdf (https://api.nzx.com/public/announcement/451558/attachment/443261/451558-443261.pdf)

Pretty compelling metrics - an expected 47c per share FY25 dividend together with a "possibly significant  return to shareholders" on the Consumer divestment. What can go wrong?

Disc. holding.

Quote from: LoungeLizard on May 14, 2025, 06:24 PMNot many of us investing in / following FSF. Been on a bit of a tear following:

https://api.nzx.com/public/announcement/451558/attachment/443261/451558-443261.pdf (https://api.nzx.com/public/announcement/451558/attachment/443261/451558-443261.pdf)

Pretty compelling metrics - an expected 47c per share FY25 dividend together with a "possibly significant  return to shareholders" on the Consumer divestment. What can go wrong?

Disc. holding.

Currently a great share for holders with extremely short memories. FSF holders have been fleezed by farmer shareholders (the people who sold the shares but kept the control of Fonterra) for many years.

Enjoy your short term income if and when it comes ... but don't complain when the Fonterra board next time decides again to tilt the playing board and fleeze the FSF shareholders to please the controlling farmers (who sold their shares but kept the control of the board).

Quote from: BlackPeter on May 15, 2025, 08:33 AMCurrently a great share for holders with extremely short memories. FSF holders have been fleezed by farmer shareholders (the people who sold the shares but kept the control of Fonterra) for many years.

Enjoy your short term income if and when it comes ... but don't complain when the Fonterra board next time decides again to tilt the playing board and fleeze the FSF shareholders to please the controlling farmers (who sold their shares but kept the control of the board).

I'm aware of the history of the stock. And of Fontera's checkered management history.

Short term income? This year FSF are committed to paying at least 47c per  share. Last year it was 55c. The year before that $1 incl a 50c special dividend. A year ago the SP was $3.66. It's now $6.27.

One can't be complacent with any stock, but I've banked enough profits to be a comfortable holder.

Congrats LL, enjoy your win.  Dairy currently in an unprecedented boom but has always been a cyclical industry and always will be.  I'm sure you're smart enough to dance close to the exit door and when the worm turns....

Quote from: LoungeLizard on May 15, 2025, 08:56 AMI'm aware of the history of the stock. And of Fontera's chequered management history.

Short term income? This year FSF are committed to paying at least 47c per  share. Last year it was 55c. The year before that $1 incl a 50c special dividend. A year ago the SP was $3.66. It's now $6.27.

One can't be complacent with any stock, but I've banked enough profits to be a comfortable holder.

Well done.

Over the last 5 yrs. FSF has been the best NZ Milk industry investment.

Quote from: Basil on May 15, 2025, 09:22 AMCongrats LL, enjoy your win.  Dairy currently in an unprecedented boom but has always been a cyclical industry and always will be.  I'm sure you're smart enough to dance close to the exit door and when the worm turns....

Thanks Basil. And, as in any good western, always sit facing the door, so you can see who's coming and going!

https://www.nzx.com/announcements/452438 (https://www.nzx.com/announcements/452438)

$6.80 - all time high. With minimum 20-25c dividend final dividend plus the chance of a special dividend plus a capital return to come, seems like the market has woken up!

Quote from: LoungeLizard on Jun 26, 2025, 02:53 PM$6.80 - all time high. With minimum 20-25c dividend final dividend plus the chance of a special dividend plus a capital return to come, seems like the market has woken up!

Seen that action today, the good yield is what's doing it. Strangely, farmer only shares haven't moved

Quote from: Habitz on Jun 26, 2025, 03:15 PMSeen that action today, the good yield is what's doing it. Strangely, farmer only shares haven't moved

Too much money from the milk cheques lately perhaps, plus I think not as much of a cash return component for them, some (around half) gets allocated as an offset somewhere if I am not mistaken.

Quote from: LoungeLizard on Jun 26, 2025, 02:53 PM$6.80 - all time high. With minimum 20-25c dividend final dividend plus the chance of a special dividend plus a capital return to come, seems like the market has woken up!

Pretty sure they hit 8 bucks over 20 years ago...

Quote from: Otago K on Jun 26, 2025, 03:58 PMToo much money from the milk cheques lately perhaps, plus I think not as much of a cash return component for them, some (around half) gets allocated as an offset somewhere if I am not mistaken.

Not enough money from the milk cheques which explains farmers cashing in their shares. Btw one FCG share receives the same ord dividend etc, as one FSF unit. Not sure why dairy farmers are not investing in the best return and now safest yield. $2 gap

FSF still going strong. Over $7 at one point. A year ago it less than $4. That's some gain!

Looks like the $7 resistance level has gone. Onwards and upwards from here. End of year result should be a good one, some form of capital return is likely in the near future, and a final dividend in excess of 20c (could be a lot more) is on the cards. When any/all of these get announced the SP could blow imo.

my prediction on the final dividend based on what we have seen in previous years.

EPS         75c/share
Div %       75% (policy 60-80%)
Total Div   56c/share
Interum Div 22c/share
Final Div   34c/share

Last interum div had all the tax paid as part of the PIE so we got the full 22c in the bank. lets hope this continues.

What are you going to do with yours?

Quote from: Tim nice but dim on Aug 11, 2025, 01:47 PMmy prediction on the final dividend based on what we have seen in previous years.

EPS         75c/share
Div %       75% (policy 60-80%)
Total Div   56c/share
Interum Div 22c/share
Final Div   34c/share

Last interum div had all the tax paid as part of the PIE so we got the full 22c in the bank. lets hope this continues.

What are you going to do with yours?

For the last two years they've paid a 40c final dividend.  Don't think it will be quite that high so you could be on the money with something around 30c. Will find out soon. Up 15c today so far ;D

Quote from: LoungeLizard on Aug 11, 2025, 04:03 PMFor the last two years they've paid a 40c final dividend.  Don't think it will be quite that high so you could be on the money with something around 30c. Will find out soon. Up 15c today so far ;D

The change is the dividend policy up from 40-60% to 60-80% of EPS.

Quite interesting. Milk is a cyclical stock - and lows have been 2 to 3 years ago. Actually - this is what it takes to get new calfs into milk production.

What do we expect? Another high around the $8 and than it goes down again?

BTW ... The amazing divy was only paid for a third fo the time ... if I trust the D's in yahoo ...

Attached yahoo divs. Suspended between April 2018 & Sept 2020

https://www.nzx.com/announcements/457279 (https://www.nzx.com/announcements/457279)

A projected capital return of $2 per share. I wonder how that will be distributed between farmer shareholders and public shareholders?

Quote from: LoungeLizard on Aug 22, 2025, 09:13 AMhttps://www.nzx.com/announcements/457279 (https://www.nzx.com/announcements/457279)

A projected capital return of $2 per share. I wonder how that will be distributed between farmer shareholders and public shareholders?

The statement implies $2.00 per FSF share. If that's the case, then WOW for holders! (Patiently waiting to see the fine print tho'.)

Quote from: Left Field on Aug 22, 2025, 09:42 AMThe statement implies $2.00 per FSF share. If that's the case, then WOW for holders! (Patiently waiting to see the fine print tho'.)

This is my best performing stock have been quietly increasing my holding from 6.18c on 13/5/25.

Quote from: Left Field on Aug 22, 2025, 09:42 AMThe statement implies $2.00 per FSF share. If that's the case, then WOW for holders! (Patiently waiting to see the fine print tho'.)

Hope, you're right LF, although there's a few hurdles to clear first.

Excellent news for us holders, but I agree with some of the comments on the other channel that this is a backward step for NZ. Fonterra is one of the biggest producers and exporters of dairy products in the world and yet it doesn't back itself to take the industry "to the next level." Moving out of the consumer, added-value chain and just being an ingredient provider seems to me to be the opposite of what has been talked about for decades.

An IPO with Fonterra retaining majority ownership would have been a better deal IMO.

Quote from: seaweed on Aug 22, 2025, 09:49 AMThis is my best performing stock have been quietly increasing my holding from 6.18c on 13/5/25.

Good on you Seaweed. Let's both of us hang in there longer with our Spark holdings ;)

looking back when this was first announced the estimated sale price was $2.6 - $3.4 B. They got $3.845 B in the end so they have far exceeded the initial predictions.

Given that return to holders will be $2.00/share (with 1,716,601,539 shares on issue) resulting in return to holders of $3.432 B. So the sale process has chewed up $413 M of the sale price or 10.74% of proceeds. I didn't think this would be cheap.

I dont think that Fonterra is that stoopid, tens of millions is more the ballpark. Whatever is left will go into capital to use to improve farmer returns. They have said they're aiming for higher returns on capital, so could be a $10 share price in a couple of years based on higher earnings plus the $2 capital payout

Nice outcome..... well done FSF

Update on divestment of Consumer and associated businesses
 
 Fonterra Co-operative Group Limited has today announced that the dispute with Bega Cheese Limited in relation to the Bega licences has been resolved.
 
 Bega agrees that the structure of the sale to Lactalis of Fonterra's global Consumer and associated businesses does not constitute a change of control under the Bega licences.
 
 As a result, the Bega licences held by Fonterra's Australian business will be included in the divestment.
 
 As previously announced, Lactalis will pay Fonterra $375 million for the Bega licences in addition to the $3.845 billion base enterprise value, bringing the total proceeds for the sale of the Consumer and associated businesses to $4.22 billion.
 
 Fonterra has agreed to pay Bega's legal costs to resolve the dispute.

Quote from: Left Field on Aug 26, 2025, 08:52 AMNice outcome..... well done FSF

Update on divestment of Consumer and associated businesses
 
 Fonterra Co-operative Group Limited has today announced that the dispute with Bega Cheese Limited in relation to the Bega licences has been resolved.
 
 Bega agrees that the structure of the sale to Lactalis of Fonterra's global Consumer and associated businesses does not constitute a change of control under the Bega licences.
 
 As a result, the Bega licences held by Fonterra's Australian business will be included in the divestment.
 
 As previously announced, Lactalis will pay Fonterra $375 million for the Bega licences in addition to the $3.845 billion base enterprise value, bringing the total proceeds for the sale of the Consumer and associated businesses to $4.22 billion.
 
 Fonterra has agreed to pay Bega's legal costs to resolve the dispute.

Should give the SP a further boost. Incredible run over the last 18 months or so - doubling in value. Glad I bought in a year ago - just wish I'd bought more!
 If the sale goes through and FSF confirm a substantial payout to shareholders ($2 per share?) plus a 20c+ divvy coming in October, could the SP get close to $10??

Just 6 or 12 months ago virtually no one made comments about Fonterra apart from the odd person saying crap like, investing in Fonterrible is a waste of money. I'm liking the change in sentiment

Quote from: LoungeLizard on Aug 26, 2025, 10:46 AMShould give the SP a further boost. Incredible run over the last 18 months or so - doubling in value. Glad I bought in a year ago - just wish I'd bought more!
 If the sale goes through and FSF confirm a substantial payout to shareholders ($2 per share?) plus a 20c+ divvy coming in October, could the SP get close to $10??

Good on you getting in early. You can still buy more on the way up to $10. I am a Johnny come lately and am still buying and will keep going for a while longer. We just have a little block at 7.45. I nominate Basil to smash through that 103,000 barrier then it is a clear run to 7.50. Bought some more today to help it along and probably buy more tomorrow. Greedy am I on this.   

It's having a wonderful run but I'm not favorably inclined to buy any cyclical company at the top of the cycle. Best wishes to holders.

Apparently yesterday's settlement with bega brings it to around 4.1 bl sale price.

Quote from: Basil on Aug 26, 2025, 11:04 PMIt's having a wonderful run but I'm not favorably inclined to buy any cyclical company at the top of the cycle. Best wishes to holders.

Farmgate prices are high right now and we know that becomes the FSF input COGS price.
If Fonterra is right that ROI will improve without consumer then that can also help.
Please run your trusty nose over their numbers Basil

Quote from: Habitz on Aug 27, 2025, 04:58 PM.....Please run your trusty nose over their numbers Basil

Shhhhhhh Habitz not so loud, Seeweed and others are still averaging up, still accumulating .  ;)

Both ATM and FSF doing well lately.

Neck and neck over the last 12 mnths in terms of SP appreciation, tho' FSF is promising better dividends/sale proceeds.

Both well positioned IMO, going to be interesting watching.

Quote from: Habitz on Aug 27, 2025, 04:58 PMFarmgate prices are high right now and we know that becomes the FSF input COGS price.
If Fonterra is right that ROI will improve without consumer then that can also help.
Please run your trusty nose over their numbers Basil

Quote from: Left Field on Aug 27, 2025, 07:24 PMShhhhhhh Habitz not so loud, Seeweed and others are still averaging up, still accumulating .  ;)

Quote from: Left Field on Aug 27, 2025, 07:24 PMShhhhhhh Habitz not so loud, Seeweed and others are still averaging up, still accumulating .  ;)

I heard that. I better stop buying now, sometimes I get carried away and over buy stocks like I did with SPK. And yes it would be good to hear what Basil has to say about the numbers. I am just a Johnny come lately and thought buying in at 6.18 was at the scary heights and it is still scary buying in over $7. Maybe $8 might be the new heights. 

SP on the move ahead of the annual result on Thursday. It will be a good one for sure. Will be interesting to see whether there is a special dividend on top of the circa 20-25c dividend expected.

Quote from: LoungeLizard on Sep 23, 2025, 10:46 AMSP on the move ahead of the annual result on Thursday. It will be a good one for sure. Will be interesting to see whether there is a special dividend on top of the circa 20-25c dividend expected.

With the change to the dividend policy to 60-80% of NPAT this can & will accommodate dividends  seen last year without the need for a special dividend. Please see my post #30 for details.

Quote from: Tim nice but dim on Sep 23, 2025, 02:26 PMWith the change to the dividend policy to 60-80% of NPAT this can & will accommodate dividends  seen last year without the need for a special dividend. Please see my post #30 for details.

Got that, but I'm not sure that is how it will go. Doesn't really matter from investors point of view but FSF may want to differentiate the normal from the non-reoccurring.   

Quote from: LoungeLizard on Sep 23, 2025, 02:41 PMGot that, but I'm not sure that is how it will go. Doesn't really matter from investors point of view but FSF may want to differentiate the normal from the non-reoccurring.   

I'm looking to upgrade my car right now.

Quote from: Tim nice but dim on Sep 23, 2025, 02:44 PMI'm looking to upgrade my car right now.

Mine is going straight on the overdraft dammit.

Dividend hunters moving in. Up 35c.

Quote from: LoungeLizard on Sep 24, 2025, 10:47 AMDividend hunters moving in. Up 35c.

Nice.... already got my fill  ;)

Quote from: LoungeLizard on Sep 24, 2025, 10:47 AMDividend hunters moving in. Up 35c.

Yes, looking good, but looks like the cat is out of the bag. I didn't quite get to my target, but am happy with what I got and picked up an extra 4000 on open for $7.50. Might pick up another lot if price comes back this afternoon. I think this is called greed. 8) 

Quote from: seaweed on Sep 24, 2025, 11:37 AMYes, looking good, but looks like the cat is out of the bag. I didn't quite get to my target, but am happy with what I got and picked up an extra 4000 on open for $7.50. Might pick up another lot if price comes back this afternoon. I think this is called greed. 8) 

Probably still room for further improvement in the SP tomorrow. The result should be very good, the dividend could be around (my guess) 30c and there may be more details about the capital return, which if anyone has forgotten, has been flagged as being $2 per share.
And on that, I would like to see a bit more transparency about the return, particularly that it will apply to unit holders as well as shareholders. The assumption is that it will - there would be no basis not to - but it would be good to see it in writing!

Since the initial announcement they have upgraded the sale price quite significantly. I'm picking 2 dollars minimum.

Quote from: LoungeLizard on Sep 24, 2025, 12:09 PMProbably still room for further improvement in the SP tomorrow. The result should be very good, the dividend could be around (my guess) 30c and there may be more details about the capital return, which if anyone has forgotten, has been flagged as being $2 per share.
And on that, I would like to see a bit more transparency about the return, particularly that it will apply to unit holders as well as shareholders. The assumption is that it will - there would be no basis not to - but it would be good to see it in writing!

Sorry about that. Was buying in aggressively in last 45 min of trading from $7.64. Am also looking forward to results tomorrow. 

Quote from: LoungeLizard on Sep 24, 2025, 12:09 PMAnd on that, I would like to see a bit more transparency about the return, particularly that it will apply to unit holders as well as shareholders. The assumption is that it will - there would be no basis not to - but it would be good to see it in writing!

I too am nervous about capital return to unit holders, especially after unsubstantiated comments on the other channel.

see https://www.fonterra.com/content/dam/fonterra-public-website/fonterra-new-zealand/documents/pdf/fsf/deed-of-amendment-and-restatement-of-authorised-fund-contract.pdf (https://www.fonterra.com/content/dam/fonterra-public-website/fonterra-new-zealand/documents/pdf/fsf/deed-of-amendment-and-restatement-of-authorised-fund-contract.pdf)

p22 section 11.1

"11. DISTRIBUTIONS AND SECURITIES OFFERINGS

11.1 Distributions: On each occasion that Fonterra declares or pays any dividend or makes any other
Distribution, Fonterra and the Manager shall co-operate to ensure that record dates and other
mechanics are aligned to enable the relevant entitlement to be passed through to the appropriate
Unit Holders."

I hope I have read this right & conclude that ANY distribution shall apply to unit holders. Not sure what the word "appropriate" means in this context.

1 sleep to the final dividend announcement.

I would not expect to see any further details on the reimbursement details until an info pack is prepared for Farmer Shareholder for the vote. I would love to see what they are doing with the rest of the $$$$$ from the sale outside of the $2.00 returned to holders.

LL
same status as last capital return in 2023. To both FSF and FCG.
There is no need to keep wondering when you have tools to essily check

Here's the news folks ......holders should be happy.....nice to see dividend increased (.35c final divvy,)  tho' eps flat.

https://www.nzx.com/announcements/459423

Fonterra reports continued strong performance in FY25
 
 · Total Group revenue: NZ $26 billion, up 15%
 · Total cash returns to shareholders: $16 billion, up 30.6%
 · Operating profit: NZ $1,732 million, up 13%
 · Profit after tax: NZ $1,079 million, down 4%, up 13% tax-adjusted
 · Normalised earnings per share: 71 cents, no change, up 13 cents tax-adjusted
 · FY25 full year dividend, fully imputed: 57 cents per share, up from 55 cents unimputed
 · Return on Capital: 10.9%, down from 11.3%, up from 10.0% tax-adjusted

Fonterra's FY26 forecast earnings from continuing operations, which excludes the businesses to be divested, is 45-65 cents per share.
 
 "Our forecast earnings for the year ahead exclude earnings from the businesses to be divested and is in line with the strong performance we've delivered in FY25."
 
 Looking further ahead, as well as targeting earnings to return to current levels in three years, Fonterra has confirmed it is maintaining the strategic targets and policy settings announced in September 2024, if Mainland Group is divested.
 
 This includes a target average Return on Capital of 10-12% from FY26, which is above Fonterra's 5-year average.
 

Looking forward. Back out the final divvy of 35 cps and the pending $2 capital return you have eps at mid point of forecast of 55 cps on a net share price of $5.55.

Forward PE of 10. They say they aim to have eps back to 71 cents within 3 years which if achieved would put it on a FY28 PE of 8.

These metrics look sort of okay to me but I can't shake my sense that this is a cyclical commodity company trading at the top of the cycle in which case they should be trading on lower metrics.

 The spread between the two different classes of shares suggests one is overpriced or the other is underpriced. Do non farmer shareholders really know better than farmers deeply involved in the industry ?  Best wishes to holders.

Quote from: Basil on Sep 25, 2025, 09:01 AMLooking forward. Back out the final divvy of 35 cps and the pending $2 capital return you have eps at mid point of forecast of 55 cps on a net share price of $5.55.

Forward PE of 10. They say they aim to have eps back to 71 cents within 3 years which if achieved would put it on a FY28 PE of 8.

These metrics look okay to me but I can't shake my sense that this is a cyclical commodity company trading at the top of the cycle. What could possibly go wrong...

Good observations. Have you factored in the management team, they're underpromising and over delivering?

Quote from: Tim nice but dim on Aug 22, 2025, 02:16 PMlooking back when this was first announced the estimated sale price was $2.6 - $3.4 B. They got $3.845 B in the end so they have far exceeded the initial predictions.

Given that return to holders will be $2.00/share (with 1,716,601,539 shares on issue) resulting in return to holders of $3.432 B. So the sale process has chewed up $413 M of the sale price or 10.74% of proceeds. I didn't think this would

https://api.nzx.com/public/announcement/459423/attachment/452902/459423-452902.pdf (https://api.nzx.com/public/announcement/459423/attachment/452902/459423-452902.pdf)

https://api.nzx.com/public/announcement/459423/attachment/452902/459423-452902.pdf (https://api.nzx.com/public/announcement/459423/attachment/452902/459423-452902.pdf)

More detail on sale process today

Slide 17
Sale costs $300M
Retained earnings $700M

Quote from: Basil on Sep 25, 2025, 09:01 AMLooking forward. Back out the final divvy of 35 cps and the pending $2 capital return you have eps at mid point of forecast of 55 cps on a net share price of $5.55.

Forward PE of 10. They say they aim to have eps back to 71 cents within 3 years which if achieved would put it on a FY28 PE of 8.

These metrics look sort of okay to me but I can't shake my sense that this is a cyclical commodity company trading at the top of the cycle in which case they should be trading on lower metrics.

 The spread between the two different classes of shares suggests one is overpriced or the other is underpriced. Do non farmer shareholders really know better than farmers deeply involved in the industry ?  Best wishes to holders.

The company and the commodity are actually quite separate in this instance.  Usually a lower milk price equates to higher earnings. So to be achieving this in a stronger sales environment is actually positive long term.

Excellent result as expected and a (slightly) unexpected divvy of 35c. Congrats to holders.

Quote from: Basil on Sep 25, 2025, 09:01 AMThese metrics look sort of okay to me but I can't shake my sense that this is a cyclical commodity company trading at the top of the cycle in which case they should be trading on lower metrics.

The future risk with FSF is whether the decision to sell the retail brands; a.) will be approved, and b.) proves to be the right decision.

There's certainly risks with execution of their forward strategy.  Only time will tell if FSF are on the right track.

These risks are somewhat mitigated by the healthy 70% SP gain in the last 12 months, past and projected dividends plus capital return.

Holders who purchased at lower prices in the last 12 months are likely 'well positioned' IMO.

Quote from: Habitz on Sep 24, 2025, 07:29 PMLL
same status as last capital return in 2023. To both FSF and FCG.
There is no need to keep wondering when you have tools to essily check

Yes, we all know what was done in the past, and it is likely that shareholders and unit holders will continue to be treated the same. But we also know that unit holders have no legal or voting rights so we are dependent on what is voted upon in the shareholders meeting. That, in my mind at least, creates a shadow of uncertainty.
It is highly unlikely that unit holders will be treated differently but it would be nice to see that spelt out in writing at some point.

Quote from: Basil on Sep 25, 2025, 09:01 AMLooking forward. Back out the final divvy of 35 cps and the pending $2 capital return you have eps at mid point of forecast of 55 cps on a net share price of $5.55.

Forward PE of 10. They say they aim to have eps back to 71 cents within 3 years which if achieved would put it on a FY28 PE of 8.

These metrics look sort of okay to me but I can't shake my sense that this is a cyclical commodity company trading at the top of the cycle in which case they should be trading on lower metrics.

 The spread between the two different classes of shares suggests one is overpriced or the other is underpriced. Do non farmer shareholders really know better than farmers deeply involved in the industry ?  Best wishes to holders.

The commodity and the company can be quite separate things in this instance. The fact they are profitable now when the input cost, milk, is high, actually bodes well for the future. As a rule the company made more money when farmers were paid less. Particularly food service.

That and increased milk supply expectations. The tides been outgoing for quite a while so it's good to see.

Quote from: Habitz on Sep 25, 2025, 09:27 AMGood observations. Have you factored in the management team, they're underpromising and over delivering?

Fonterra has been under-rated after they got rid of past ghosts and that took a long time to work through the share price. Momentum over the last year possibly carried the shares too far, unsurprisingly as positive announcement followed positive announcement. Time will tell

Correct, A cyclical commodity company with cyclical margins selling off what is arguably the best part of the business. All this with non farmer shareholder rights subordinated to farmers.  Well done to those who bought on the cheap. It's not cheap now. That's all I have to say on this one.

Food service was always a drag. It's been discussed for a decade at farmer meetings. The challenge was just how to separate it out.

Quote from: LoungeLizard on Sep 25, 2025, 10:22 AMYes, we all know what was done in the past, and it is likely that shareholders and unit holders will continue to be treated the same. But we also know that unit holders have no legal or voting rights so we are dependent on what is voted upon in the shareholders meeting. That, in my mind at least, creates a shadow of uncertainty.
It is highly unlikely that unit holders will be treated differently but it would be nice to see that spelt out in writing at some point.

https://api.nzx.com/public/announcement/459423/attachment/452896/459423-452896.pdf (https://api.nzx.com/public/announcement/459423/attachment/452896/459423-452896.pdf)

P30 of annual report

"Fonterra is targeting a tax free capital return of $2.00 per share to shareholders & unit holders"

Quote from: Tim nice but dim on Sep 25, 2025, 01:16 PMhttps://api.nzx.com/public/announcement/459423/attachment/452896/459423-452896.pdf (https://api.nzx.com/public/announcement/459423/attachment/452896/459423-452896.pdf)

P30 of annual report

"Fonterra is targeting a tax free capital return of $2.00 per share to shareholders & unit holders"

Thanks for that - missed it entirely!

Useful background article to the forthcoming vote on the proposed Mainland divestment....

https://www.odt.co.nz/business/fonterra's-sale-mainland-hinges-special-vote

Quote from: Basil on Sep 25, 2025, 09:01 AMThese metrics look sort of okay to me but I can't shake my sense that this is a cyclical commodity company trading at the top of the cycle in which case they should be trading on lower metrics.

I acquired these quite some time ago I have enjoyed stellar returns to date. I now think I should be fear full as others are being very greedy.

I am trying to understand "this is a cyclical commodity company trading at the top of the cycle" & have obtained data on WMP below but it does not show the cyclical nature mentioned above, nor does it correspond to the historical FSF share price.

Any advise for where else I should look?


https://figure.nz/chart/JKLzuIDVRXN52MXh-CZvNsxt7sXsDiHil

Quote from: Tim nice but dim on Sep 28, 2025, 04:56 PMI acquired these quite some time ago I have enjoyed stellar returns to date. I now think I should be fear full as others are being very greedy.

I am trying to understand "this is a cyclical commodity company trading at the top of the cycle" & have obtained data on WMP below but it does not show the cyclical nature mentioned above, nor does it correspond to the historical FSF share price.

Any advise for where else I should look?


https://figure.nz/chart/JKLzuIDVRXN52MXh-CZvNsxt7sXsDiHil

Well done, on your success with FSF.
Certainly going forward Fonterra is going more down the commodity line of business.
My logic without the brands business is it maybe more as return to the past for determination of the dividend payment. If the milk price they are paying the farmers ends up too high, or close to break even for the operations then the dividend drops. Early in the supply season but quite high payout to historical levels and suspect they may be reluctant to cut it, if the ongoing global dairy auctions are high then many countries have capacity to eek a bit more production, NZ a small % of global dairy production but a much higher % of dairy global trade, the one large market China maybe adds to risk.

I too am a long term investor and am very content with FSF as an investment, but logically would want to consider how much I hold in my portfolio based around how many $ I have put in, and if I might not prefer to move some funds into alternative stocks or investments maybe now is the optune time. Do think FSF will go up and down over the next few years, suspect some have thoughts the $2 payback is worth a bit more than I do. Discl still have a standard sort of portfolio % at current SP $ holding in some portfolio entities but not overweight at all.I may be just spooked some but what helps one sleep isn't to be ignored, feel some alternatives and suspect there will come a day in the next 24 months that I might BUY back some.

Quote from: Otago K on Sep 28, 2025, 05:26 PMWell done, on your success with FSF.
Certainly going forward Fonterra is going more down the commodity line of business.
My logic without the brands business is it maybe more as return to the past for determination of the dividend payment. If the milk price they are paying the farmers ends up too high, or close to break even for the operations then the dividend drops. Early in the supply season but quite high payout to historical levels and suspect they may be reluctant to cut it, if the ongoing global dairy auctions are high then many countries have capacity to eek a bit more production, NZ a small % of global dairy production but a much higher % of dairy global trade, the one large market China maybe adds to risk.

I too am a long term investor and am very content with FSF as an investment, but logically would want to consider how much I hold in my portfolio based around how many $ I have put in, and if I might not prefer to move some funds into alternative stocks or investments maybe now is the optune time. Do think FSF will go up and down over the next few years, suspect some have thoughts the $2 payback is worth a bit more than I do. Discl still have a standard sort of portfolio % at current SP $ holding in some portfolio entities but not overweight at all.I may be just spooked some but what helps one sleep isn't to be ignored, feel some alternatives and suspect there will come a day in the next 24 months that I might BUY back some.

Thanks for the advise, much appeciated.

I have looked at the historical Farmgate milk price, shows a gradual increase from 17-18 with a high price outlier in 21-22. Does not appear to me to be effecting EPS significantly.

Too many factors in play to make any accurate prediction for FY 2026 dividend, perhaps a net yield of 7.5% (assuming the share price reduces $2 after capital return). I shall evaluate after interum results announced in early 2026. This would be a good time for me to determine my future holding intentions.

I would still like to hear from anyone with any additional info to support "cyclical commodity nature" of this business.

https://www.nzx.com/announcements/459632 (https://www.nzx.com/announcements/459632)

Good information booklet on the likely effect (and risk) of the divestment process. Encouraging to read that Management predicts "Earnings to be back at FY25 levels within three years, offsetting the earnings impact of divestment." That seems to have gone down well with analysts who have "lifted their 12-month target price on units in the Fonterra Shareholders' Fund" according to BusinessDesk this morning.

Quote from: Tim nice but dim on Sep 28, 2025, 10:24 PMI would still like to hear from anyone with any additional info to support "cyclical commodity nature" of this business.

Here is is from the ...ummm....the horse's mouth, "Dairy farming is very cyclical."
https://www.rnz.co.nz/news/business/574155/latest-farmgate-milk-payout-may-be-new-norm-says-federated-farmers-boss

 

And here: https://kpmg.com/nz/en/home/insights/2023/09/volatility-in-dairy-payouts.html  "The dairy industry is no stranger to volatility." 

Check out the groovy graph

Quote from: Hectorplains on Sep 29, 2025, 06:20 PMAnd here: https://kpmg.com/nz/en/home/insights/2023/09/volatility-in-dairy-payouts.html  "The dairy industry is no stranger to volatility." 

Check out the groovy graph

Many thanks for your help, I really appreciate your efforts. I only went back to 2018, not far enough it seems.

If there is that much volatility in milk price then that will have down stream effects on other reported figures. I have my answer & shall proceed with caution.

Quote from: seaweed on Sep 24, 2025, 11:37 AMYes, looking good, but looks like the cat is out of the bag. I didn't quite get to my target, but am happy with what I got and picked up an extra 4000 on open for $7.50. Might pick up another lot if price comes back this afternoon. I think this is called greed. 8) 

That was written on 24/9/25. Am happy with my holding it appears to be $90,000+ in the green but may pull back a bit tomorrow being ex div day. It was scary buying in as a Johny come lately at the giddy heights of $6 to $7.50 range.

Quote from: seaweed on Sep 30, 2025, 03:49 PMThat was written on 24/9/25. Am happy with my holding it appears to be $90,000+ in the green but may pull back a bit tomorrow being ex div day. It was scary buying in as a Johny come lately at the giddy heights of $6 to $7.50 range.

Congrats Seaweed - fortune favours the brave! (sometimes). I wish I'd bought more back in May last year, when they first announced the new business separation/divestment strategy. Ended up with 20k parcel at $3.70-$3.80. Very much a conviction buy/hold that the P/E mathematicians would never bother with and hence flew under the radar for a long time.

Nice surge in the SP today which should mean that the SP will settle around $7.90-$8 tomorrow ex-dividend. That's still well north of where it was only a few weeks ago. The next bump will be on 30/10 when/if (probably when) the divestment plan is ratified. What the prospect of $2 per share tax-free cash return will do to the SP is anyone's guess.

Well done LL & Seaweed.... fortune favours the brave indeed. Great times for holders.

Quote from: LoungeLizard on Sep 30, 2025, 04:42 PMCongrats Seaweed - fortune favours the brave! (sometimes). I wish I'd bought more back in May last year, when they first announced the new business separation/divestment strategy. Ended up with 20k parcel at $3.70-$3.80. Very much a conviction buy/hold that the P/E mathematicians would never bother with and hence flew under the radar for a long time.

Nice surge in the SP today which should mean that the SP will settle around $7.90-$8 tomorrow ex-dividend. That's still well north of where it was only a few weeks ago. The next bump will be on 30/10 when/if (probably when) the divestment plan is ratified. What the prospect of $2 per share tax-free cash return will do to the SP is anyone's guess.

I agree, historical XD data below ...

With still some food on the table we should see share price return to XD price quite quickly following tomorrows drop (perhaps 2 months).

With the last capital return share price recovery was 9 months. That was 1/4 of what is proposed so perhaps expect at least 2 years for share price recovery following this $2.00 return.

Quote from: Tim nice but dim on Sep 30, 2025, 07:10 PMI agree, historical XD data below ...

With still some food on the table we should see share price return to XD price quite quickly following tomorrows drop (perhaps 2 months).

With the last capital return share price recovery was 9 months. That was 1/4 of what is proposed so perhaps expect at least 2 years for share price recovery following this $2.00 return.

With close today @ $8.36, that's above the the XD closing price this is only 0.5 months to recover the share price WOW!

Check the next week to see if it holds.

The real interesting moment will be in two weeks time when/if (probably when) the shareholders ratify the divestment strategy . If ratified, what will the stated $2 per share return of capital do to the SP? How much is already built in?

Quote from: LoungeLizard on Oct 14, 2025, 07:20 PMThe real interesting moment will be in two weeks time when/if (probably when) the shareholders ratify the divestment strategy . If ratified, what will the stated $2 per share return of capital do to the SP? How much is already built in?

good morning and good question, buy the reports and sell the news. it is 6.30am over here and still dark. LA

Decision day.....

Quote from: Left Field on Oct 30, 2025, 07:02 AMDecision day.....

Yes, decision day. Going to be interesting watching the sp reaction.

Quote from: seaweed on Oct 30, 2025, 08:20 AMYes, decision day. Going to be interesting watching the sp reaction.

Yes hard to predict....a strong vote of confidence could boost the sp.... or is a favourable decision already factored into the SP? 

Today we will see how 'well positioned' we are!

88% in favour of divestment.

https://www.nzx.com/announcements/461679

"Fonterra's farmer shareholders have given the go ahead for the Co-operative to sell its global Consumer and associated businesses, Mainland Group, to Lactalis for $4.22 billion, with 88.47% of the total farmer votes cast in support of the divestment.....

....The threshold required to approve the sale was for more than 50% of the votes from those entitled to vote (based on share-backed kgMS) and who actually voted to be in favour of the proposal.
 
 Completion of the divestment remains subject to securing certain regulatory approvals and the separation of Mainland Group business from Fonterra, both of which are well underway.
 
 Subject to these steps being completed, Fonterra expects the transaction to complete in the first half of the 2026 calendar year.
 
 Fonterra is targeting a tax-free capital return of $2 per share to shareholders and unit holders, equivalent to $3.2 billion, once the sale is complete.
 
 Another shareholder vote will be required for the payment of the capital return. The process for that capital return is expected to be by way of a scheme of arrangement under Part 15 of the Companies Act 1993.
 
 The Co-op plans to provide more detail on the timing and process for the capital return in early December."

 

Not a big reaction from the market as yet. The SP has been surging for the last year or so, since the divestment strategy was first announced, so maybe most of it has been built in. Still, early days. A $2 tax free return might tempt the buyers in as we get closer to pay day!

Quote from: LoungeLizard on Oct 30, 2025, 12:01 PMNot a big reaction from the market as yet. The SP has been surging for the last year or so, since the divestment strategy was first announced, so maybe most of it has been built in. Still, early days. A $2 tax free return might tempt the buyers in as we get closer to pay day!

If the capital return is priced in already which I think it is, won't the payout be adjusted off the shareprice. I haven't calculated the forecast yield then but I think it's above average

My guess is that the SP will probably continue to lift - $9? - as we near the actual payout date, which is sometime away yet.
AFter payout, there will definitely be a drop. Fonterra are forecasting earnings for FY26 to be 45-65c per share, which excludes the divestment. The new dividend policy is 60-80% of earnings.
They are naturally being pretty bullish about the business going forward and are aiming at earnings being restored to current levels within three years.
I think FCf is a keeper after divestment/payout but it remains to be seen how the new strategy is executed.

Will an under 9 percent 8.7 to be exact, forecast div yield be enough for investors. Ie 55 cents earnings at mid point by 80 percent payout ratio and grossed up for tax credits on a 7 dollar share price post payout. It must be in the ballpark

Quote from: Habitz on Nov 01, 2025, 07:48 AMWill an under 9 percent 8.7 to be exact, forecast div yield be enough for investors. Ie 55 cents earnings at mid point by 80 percent payout ratio and grossed up for tax credits on a 7 dollar share price post payout. It must be in the ballpark

I am looking at Morningside numbers. Ignore the special $2 div pay out for a minute or two. If FSF is paying a 57c div for the year, then the YLD at $8.30 is about 6.87% and at $6.30 the YLD is at about 9.05% which to me is a good YLD compared to the bank. So looking at the mid point a sp of $7.30 the YLD is about 7.8% which is not a too bad YLD compared to the bank. So if sp drops $2 after special div to say $6.30 I would predict a lot of support for it to go back to $7 again. This is todays numbers with sp at $8.30c. If sp goes to $9 or $10 before $2 div then that's icing on the cake. IF FSF declared a real positive update on ex div day, as what SEK did on their ex div day 17/9/25, then that will also support the sp. 

Interesting that the SP has fallen back slightly after the divestment plan was ratified. Although I note there still needs to be another shareholder vote on the return of capital, although that should be a formality as Management has already flagged a return of $2 per share/unit.
Peculiar then that some have chosen to sell now ahead of an assured big payday in the first half of next year. Thoughts as to why?

Quote from: LoungeLizard on Nov 20, 2025, 04:59 PMInteresting that the SP has fallen back slightly after the divestment plan was ratified. Although I note there still needs to be another shareholder vote on the return of capital, although that should be a formality as Management has already flagged a return of $2 per share/unit.
Peculiar then that some have chosen to sell now ahead of an assured big payday in the first half of next year. Thoughts as to why?

Perhaps the recent decline in dairy auction prices and associated concerns regarding Fonterra's ability to maintain margins, revenue targets etc???

Quote from: LoungeLizard on Nov 20, 2025, 04:59 PMInteresting that the SP has fallen back slightly after the divestment plan was ratified. Although I note there still needs to be another shareholder vote on the return of capital, although that should be a formality as Management has already flagged a return of $2 per share/unit.
Peculiar then that some have chosen to sell now ahead of an assured big payday in the first half of next year. Thoughts as to why?

Quote from: Left Field on Nov 20, 2025, 05:25 PMPerhaps the recent decline in dairy auction prices and associated concerns regarding Fonterra's ability to maintain margins, revenue targets etc???

Absolutely - Fonterra is a highly cyclical company - and milk price seems to just start coming down form another high. Past years show what they do with shareholders when times are bad.

Makes a lot of sense to sell the shares before everybody drops them, doesn't it?

Quote from: BlackPeter on Nov 21, 2025, 08:32 AMAbsolutely ....
Makes a lot of sense to sell the shares before everybody drops them, doesn't it?

I wouldn't go as far as saying FSF is a 'sell'.

Much depends on your investing strategy. Traders will probably sell for short term profits...... those with a longer term focus may take their $2 payout and wait to see how Fonterra's new 'non-branded ingredients focused' strategy works out (maybe even using their new cash to buy more (cheaper) FSF shares,) while enjoying FSF  dividends (currently around 7% on today's SP).

JMHO. DYOR.



 

Quote from: Left Field on Nov 21, 2025, 09:36 AM(maybe even using their new cash to buy more (cheaper) FSF shares,)

Yes it's interesting to think what FSF will be worth post distribution. The public seem to think that Fonterra holders and dairy farmers are getting $400,000 of easy cash. Wrong. Shareholders are mostly paying for their own dividend with a commensurate drop in market price. We'll see

My view is that the Fonterra's core business as the biggest exporter of raw dairy product in the world, should be about as future-proof as any industry although there will be ups and downs with dairy prices. Fonterra is in very good shape, so if one takes a long lens to the industry,  it is probably worthwhile taking the big payday, buckling up for the drop in SP and then waiting out for the recovery

disc. holder and buying more.

Quote from: Left Field on Nov 21, 2025, 09:36 AMI wouldn't go as far as saying FSF is a 'sell'.

Much depends on your investing strategy. Traders will probably sell for short term profits...... those with a longer term focus may take their $2 payout and wait to see how Fonterra's new 'non-branded ingredients focused' strategy works out (maybe even using their new cash to buy more (cheaper) FSF shares,) while enjoying FSF  dividends (currently around 7% on today's SP).

JMHO. DYOR.



 

I didn't call them a sell, I was just commenting on market development.

Having said that - they are currently quite high, and unless there is something new and still unknown happening, the $2 payback is sort of booked in, and milkprice will go up and down in future, as it always did in the past.

Fonterra is a big milkpowder producer and competing with the rest of the world. Agricultural products are just cyclical.

Based on current EP, they are probably a hold. Its just that cyclicals at or after their high typically come down, before they go up again. Not my preferred time for buying, but hey - good luck to all.

Latest from Fonterra

https://www.nzx.com/announcements/463914

Fonterra provides FY26 Q1 business update
 
 • Total Group profit after tax: $278 million, up $15 million
 • Continuing operations profit after tax: $158 million, down $10 million
 • FY26 forecast earnings for continuing operations: 45-65 cents per share
 • 2025/26 forecast Farmgate Milk Price: $9.00 - $10.00 per kgMS, with midpoint of $9.50 per kgMS.

https://www.nzx.com/announcements/464405 (https://www.nzx.com/announcements/464405)

- Shareholder vote on $2 per unit return of capital on 19 February
- The higher return on capital (12%) of the Foodstuffs channel seems to have been the basis for the divestment of the Consumer business.
- Targeting earnings to be back to FY25 levels by FY28, offsetting the divestment.
- Forecast earnings for FY26 are 45-65 cents per share for continuing operations.

Bit of late from the Farmers Weekly 8 December print edition on the Fonterra Shareholders Fund, article quotes Forbar analyst predictions post the capital return. At the 8% yield and forecast 45 - 50c dividends I have calculated out an indicated value of $5.62 - $6.25 envisaged for the units is being suggested.
https://www.farmersweekly.co.nz/markets/whats-next-for-fonterra-shares/

At the end of the above article references to the following page for the online webinar "Fonterra and the Future" by Forbar
https://www.forsythbarr.co.nz/home/federated-farmers

Bit of focus on the global market supply dynamics by the NZX Head Of Dairy Insights
https://www.farmersweekly.co.nz/markets/global-milk-growth-weighs-on-prices/

Further article around global supply growth impacts to prices
https://www.farmersweekly.co.nz/markets/production-growth-driving-dairy-prices-lower-rabobank/

Quote from: Otago K on Dec 12, 2025, 07:18 PMBit of late from the Farmers Weekly 8 December print edition on the Fonterra Shareholders Fund, article quotes Forbar analyst predictions post the capital return. At the 8% yield and forecast 45 - 50c dividends I have calculated out an indicated value of $5.62 - $6.25 envisaged for the units is being suggested.
https://www.farmersweekly.co.nz/markets/whats-next-for-fonterra-shares/

The at the end of the above article references to the following page for the online webinar "Fonterra and the Future" by Forbar
https://www.forsythbarr.co.nz/home/federated-farmers

Bit of focus on the global market supply dynamics by the NZX Head Of Dairy Insights
https://www.farmersweekly.co.nz/markets/global-milk-growth-weighs-on-prices/

Further article around global supply growth impacts to prices
https://www.farmersweekly.co.nz/markets/production-growth-driving-dairy-prices-lower-rabobank/

Where the SP will settle, post return of capital, is the big question. I'd be very surprised if it goes under $6, but who knows really? I suspect there will be movement towards $9 as we get closer to the record date for payment early next year.

But if the numbers suggest an 8% return and Fonterra meet their goal of earnings retuning to pre-divestment levels in three years then taking the payday and waiting it out seems to me to be the best strategy.

 Either way unit holders have had a very good ride in the last 18 months where the SP has doubled, dividends have been very healthy and early next year a $2 per unit tax-free payment will be made.
No complaints here  ;) 

Quote from: Left Field on Nov 21, 2025, 09:36 AMI wouldn't go as far as saying FSF is a 'sell'.

Much depends on your investing strategy. Traders will probably sell for short term profits...... those with a longer term focus may take their $2 payout and wait to see how Fonterra's new 'non-branded ingredients focused' strategy works out (maybe even using their new cash to buy more (cheaper) FSF shares,) while enjoying FSF  dividends (currently around 7% on today's SP).

JMHO. DYOR.



 

just a point - Fonterra ingredients and food service products are certainly "branded". Just because the end consumer doesn't see them on a retail supermarket shelf doesn't mean they aren't adding good value. Just a different part of the chain. There's many successful global ingredients companies out there, often doing better these days than the large consumer brand companies like Nestle or Unilever who are facing real challenges, not least from the growth of supermarket own brands.     

Quote from: Nizzy on Dec 13, 2025, 11:39 AMjust a point - Fonterra ingredients and food service products are certainly "branded". Just because the end consumer doesn't see them on a retail supermarket shelf doesn't mean they aren't adding good value. Just a different part of the chain. There's many successful global ingredients companies out there, often doing better these days than the large consumer brand companies like Nestle or Unilever who are facing real challenges, not least from the growth of supermarket own brands.     

Indeed.... and while no one can predict the future, I imagine Fonterra have worked through many scenarios for their future business models and would not be surprised to hear them announce a revenue upgrade sometime next year.

Pure speculation of course but more likely than the imminent demise predicted by the likes of Winston Peters.

JMHO DYOR

Quote from: Nizzy on Dec 13, 2025, 11:39 AMjust a point - Fonterra ingredients and food service products are certainly "branded". Just because the end consumer doesn't see them on a retail supermarket shelf doesn't mean they aren't adding good value. Just a different part of the chain. There's many successful global ingredients companies out there, often doing better these days than the large consumer brand companies like Nestle or Unilever who are facing real challenges, not least from the growth of supermarket own brands.     

Agreed. The ingredients business will still have that premium branding associated with NZ dairy.

The theory is that a more streamlined, focussed Ingredients business with a higher return on capital than the Consumer business, will be more profitable and offer better returns to investors. I'm pessimistic about the global economy as such but even in a downturn or heaven forbid, a crash, people still need their dairy products. A long-term hold for me, and I'm looking forward to a pretty big payday in the first half of next year.

https://www.nzx.com/announcements/464578 (https://www.nzx.com/announcements/464578)

From the Chair's address at the AGM:

"As mentioned, Fonterra's strong performance, and progress on the divestment of its
Consumer business is reflected in the total shareholder returns for the 12-months of 68%.
Contributing to the 68% is 300 cents in unit price appreciation and 57 cents in distributions.
Over the same period, FCG and the S&P NZX50 Index returned 50% and 5%, respectively."

Can't think of many company's that have reported a 68% return to shareholders over the last 12 months?

Quote from: LoungeLizard on Dec 15, 2025, 05:32 PMhttps://www.nzx.com/announcements/464578 (https://www.nzx.com/announcements/464578)

From the Chair's address at the AGM:

"As mentioned, Fonterra's strong performance, and progress on the divestment of its
Consumer business is reflected in the total shareholder returns for the 12-months of 68%.
Contributing to the 68% is 300 cents in unit price appreciation and 57 cents in distributions.
Over the same period, FCG and the S&P NZX50 Index returned 50% and 5%, respectively."

Can't think of many company's that have reported a 68% return to shareholders over the last 12 months?

Quite silly argument. Pick one really strong uptake of a long turn downcycler, forget the 12 years where the board just drove the SP down ... and turn the one (and so far only) biggie into a sales argument?

Anybody noticed that they only brought the SP back to where it was in 2013 - any chair useful any of the money (s)he gets would have noticed that.

Just wondering whether the chair picked as well the 5 and 10 years annual returns to holders? Interesting as well why (s)he didn't pick the returns ending in 2022 / 2023?

I would say this is as stupid as selling preloved cars, but unfortunately - the used car salespeople have here in NZ much better boards and amangement than Fonterra seems to have ...

BTW: milk prices dropping ...

FSF.NZ.jpg

Quote from: BlackPeter on Dec 18, 2025, 10:28 AMQuite silly argument. Pick one really strong uptake of a long turn downcycler, forget the 12 years where the board just drove the SP down ... and turn the one (and so far only) biggie into a sales argument?

Anybody noticed that they only brought the SP back to where it was in 2013 - any chair useful any of the money (s)he gets would have noticed that.

Just wondering whether the chair picked as well the 5 and 10 years annual returns to holders? Interesting as well why (s)he didn't pick the returns ending in 2022 / 2023?

I would say this is as stupid as selling preloved cars, but unfortunately - the used car salespeople have here in NZ much better boards and amangement than Fonterra seems to have ...

BTW: milk prices dropping ...

FSF.NZ.jpg

I guess if you want to go back a decade to create an argument not to buy a stock now, then you might as well not buy anything at all. All stocks have their ups and downs, all you can do is look at the company now and what its prospects are going forward. Fonterra are in very good shape right now and I'm reasonably confident - or as confident as one can be - of their prospects post-divestment.
 
Milk prices affect the farmer much more than Fonterra who simply process the product and add their premium. If milk prices are down then Fonterra simply pays less at the gate.

Quote from: LoungeLizard on Dec 18, 2025, 04:54 PMI guess if you want to go back a decade to create an argument not to buy stock now, then you might as well not buy anything at all. All stocks have their ups and downs, all you can do is look at the company now and what its prospects are going forward. Fonterra are in very good shape right now and I'm reasonably confident - or as confident as one can be - of their prospects post-divestment.
 
Milk prices affect the farmer much more than Fonterra who simply process the product and add their premium. If milk prices are down then Fonterra simply pays less at the gate.

I choose the whole time FSF is existing. Not an unreasonable expectation, isn't it?

... and yes, apart from some short term gains for traders, Fonterra is now roughly where they were in 2013. Basically since starting FSF, shareholders could mainly worry about the size of their losses - and FSF's structure:
provide money for Fonterra without controlling the directors - has certainly helped to mitigate the return for shareholders.

But hey- everybody is welcome to invest wherever they want ... if its FSF interesting you, invest into them whatever you like.

Ah yes, and if milk prices go down farmers do something different. We had over the last years plenty of beef around mid Canterbury. For some reason at the moment its again more sheep. Do you know how this is impacting on Fonterras income? Its not hard to predict, but hey - you will notice over time anyway.

BP is green cross fan boy, he'd rather you buy chemicals from GXH to pump into your blood stream than you have Fonterra's natural proteins and compounds.

Quote from: BlackPeter on Dec 18, 2025, 05:24 PMI choose the whole time FSF is existing. Not an unreasonable expectation, isn't it?

... and yes, apart from some short term gains for traders, Fonterra is now roughly where they were in 2013. Basically since starting FSF, shareholders could mainly worry about the size of their losses - and FSF's structure:
provide money for Fonterra without controlling the directors - has certainly helped to mitigate the return for shareholders.

But hey- everybody is welcome to invest wherever they want ... if its FSF interesting you, invest into them whatever you like.

Ah yes, and if milk prices go down farmers do something different. We had over the last years plenty of beef around mid Canterbury. For some reason at the moment its again more sheep. Do you know how this is impacting on Fonterras income? Its not hard to predict, but hey - you will notice over time anyway.

I found the 68% gain over the last 12 months quite interesting for sure...

With the other Fonterra shares that only farmers can own trading just under $6 I feel caution may be warranted here.

Who knows this cyclical industry best, retail investors or dairy farmers ?

It seems to me farmers are taking Fonterra's goals of returning EPS back to current levels within 3 years after the sale of the foods division with a grain of salt so maybe retail investors should too ?

Quote from: Basil on Dec 18, 2025, 06:33 PMIt seems to me farmers are taking Fonterra's goals of returning EPS back to current levels within 3 years after the sale of the foods division with a grain of salt so maybe retail investors should too ?

Ha! ..... it'll probably reach the desired level in half that time....  ;)

Quote from: LoungeLizard on Dec 18, 2025, 04:54 PM.....................
Milk prices affect the farmer much more than Fonterra who simply process the product and add their premium. If milk prices are down then Fonterra simply pays less at the gate.

Indeed, but perhaps it was not meant to be a comment on the farmgate supply price, so much as to the overall dropping level trend in the global dairy auction prices.

Think we need to pay heed to the fact that Fonterra is in effect a farmer supplier co-op, that will have the board in the main focused to their owner's FCG shareholder interests . FSF is a bit of a adjunct symbiotic entity. and I suspect that if a year comes when at nearing year balance up of the ins and outs come up short for Fonterra, the maintaining of a consistent dividend might not that high of a priority or possibly even an option.

I personally gave up trying to model towards a prediction of Fonterra dividends long ago, but in simple terms seeing a trend of declining farmgate supply prices for the next few months might be reflective of elements that would predict a lower dividend payout level.
 I think of Fonterra as a price taker, also has the likes of exchange rate impacts to hedge or not.

discl: Overweight FSF holder across portfolios at current SP, but well free carried having bought around the $3 mark, and having sold down somewhat a few months ago.

I can not agree that FSF is a risk free great upside investment at current levels, but would be happy to be wrong, maybe I'm cynical but when everyone else is saying today what you thought yesterday, maybe it is time to switch from HOLD to SELL somemore.

Quote from: Basil on Dec 18, 2025, 06:33 PMWith the other Fonterra shares that only farmers can own trading just under $6 I feel caution may be warranted here.

Who knows this cyclical industry best, retail investors or dairy farmers ?

It seems to me farmers are taking Fonterra's goals of returning EPS back to current levels within 3 years after the sale of the foods division with a grain of salt so maybe retail investors should too ?

Sorry Basil, in regards to the FCG SP drivers I'd predict the dividend yield would not be a factor for many holders, that said I do see currently 11.5% holdings are likes of retired within ten years farmer shareholders, so there will be some impact.
I think the demand side would be really driven by the need for farmer shareholding level requirement of their own milk supply level, and how Fonterra is pricing any issues and buy backs of FCG shares.

Anecdotally the word in the milking shed might be cynical with some folk but perhaps pragmatism is high in who I might chat with, and it would be fair to say there would seem to be a skepticism about what is mere speak and what will come to be real in this regard. Decades of family memory into that mindset??

Quote from: Otago K on Dec 19, 2025, 05:43 AMIndeed, but perhaps it was not meant to be a comment on the farmgate supply price, so much as to the overall dropping level trend in the global dairy auction prices.

Think we need to pay heed to the fact that Fonterra is in effect a farmer supplier co-op, that will have the board in the main focused to their owner's FCG shareholder interests . FSF is a bit of a adjunct symbiotic entity. and I suspect that if a year comes when at nearing year balance up of the ins and outs come up short for Fonterra, the maintaining of a consistent dividend might not that high of a priority or possibly even an option.

I personally gave up trying to model towards a prediction of Fonterra dividends long ago, but in simple terms seeing a trend of declining farmgate supply prices for the next few months might be reflective of elements that would predict a lower dividend payout level.
 I think of Fonterra as a price taker, also has the likes of exchange rate impacts to hedge or not.

discl: Overweight FSF holder across portfolios at current SP, but well free carried having bought around the $3 mark, and having sold down somewhat a few months ago.

I can not agree that FSF is a risk free great upside investment at current levels, but would be happy to be wrong, maybe I'm cynical but when everyone else is saying today what you thought yesterday, maybe it is time to switch from HOLD to SELL somemore.

Good comments and fair to say that Fonterra has a chequered history regarding the shareholders fund - which is why I didn't buy until it seemed to have sorted itself out and started paying good dividends. Will that continue to happen? Fonterra seem committed to the fund but I can also see a point where they might decided to close it down (and pay out at a fair price). Being a conservative investor I see more of an upside with the fund given that, ups and downs in prices notwithstanding, people still buy milk through thick and thin.
It's from 2022 but I thought retiring Chair John Shewan's comments was a fair and very honest assessment of the funds poor performance to that date but also it's potential for progress ahead:

https://www.fonterra.com/content/dam/fonterra-public-website/fonterra-new-zealand/documents/pdf/fsf/Fonterra_Shareholders_Fund_reflections_on_10_years_in_the_chair.pdf (https://www.fonterra.com/content/dam/fonterra-public-website/fonterra-new-zealand/documents/pdf/fsf/Fonterra_Shareholders_Fund_reflections_on_10_years_in_the_chair.pdf)

Quote from: Basil on Dec 18, 2025, 06:33 PMWith the other Fonterra shares that only farmers can own trading just under $6 I feel caution may be warranted here.

Who knows this cyclical industry best, retail investors or dairy farmers ?

It seems to me farmers are taking Fonterra's goals of returning EPS back to current levels within 3 years after the sale of the foods division with a grain of salt so maybe retail investors should too ?

Short answer, that FCG are not at market. Plenty of reasons for that, such as dairy farmers not having to hold 1:1, only 1:3. Average age for a dairy farm owner is 60 plus, and still rising. If the kids inherit the shares the first thing they ask is about selling them, not how much is the yield, and that was when the SP was half what it is now.

Thanks, appreciate people sharing their point of view.  I'm sure we've all witnessed the pretty serious reductions in the global dairy auction prices for what is it now, 9 auctions in a row ?  If the size of the overall pie gets smaller, I'm skeptical the dividend part to shareholders stays the same just as I am skeptical Fonterra with their badly chequered track record can somehow magically conjure up extra earnings to replace those lost by the sale of the foods division.

The whole opaque nature of the interplay between what dairy farmers are paid and what shareholders are paid is something I also find most unsatisfactory from an investment point of view.  Who are the board really acting for, shareholder suppliers or other investors ?    Happy to leave this one to others.

"The whole opaque nature of the interplay between what dairy farmers are paid and what shareholders are paid is something I also find most unsatisfactory from an investment point of view.  Who are the board really acting for, shareholder suppliers or other investors ?    Happy to leave this one to others."

The pricing calculations are prescriptive, and you can look them up if interested. I don't think that any adhoc decisions or splits would be accepted by the nzx or anyone else.

True. What used to happen was a low dividend when the milk price was high. And vice versa. Higher input costs squeezing margin.

I have read a lot about how this share will  be effected in future & have considered each point carefully, now opinions.

1) Price FCG vs FSF

There is a significant differenence in the two share prices, is this of concern? - NO.

If you go back to the words of Ben Graham you should not concern yourself with the price Mr Market puts on a share & this should not effect your value from your own research. Clearly there are 2 Mr Markets here FCG & FSF, both groups have different business objectives. You should not let this influence your decisions.

2) Whole Milk Powder Price (WMPP)

This is a highly volatile index that is the key driver for FSF revenues
e. Is this of concern? - YES

The two graphs below show global price for last 5 years & last 12 months. This index will clearly effect EPS, I would expect by direct collelation.

Current finacial year shows a significant reduction in earning potential.

Screenshot_20251219_140211_Chrome.jpg

Screenshot_20251219_131257_Chrome.jpg

3) Farm Gate Milk Price (FGMP)

Has been mentioned repeatedly in this forum FGMP is a significant cost to the business, this is true, however it is generallly accepted that FGMP is highly correclated to WMPP, I not going to prove this here. So when WMPP falls FGMP will fall proportionatly. We are currently seeing fall in both measures.

Is this cause for concern - NO as this has been accounted for in 2).

4) Years Of Historical Earnings

I am not considering the years prior to FSF returning dividends to shareholders in 2022. The company before that time was heavily involved in overseas business that has since been closed or sold those activities, ie not the B2B model that has been sold by the board lately, those times are over for FSF & we should not compare the performance of the previous business model.

5) The future (my predictions only)

The reduction in WMPP will reduce EPS & FGMP in the short to medium term.
EPS for the next year will not meet predictions for current operations. In the past we have seen very conservative predictions for forecast EPS, I believe this year the forecast was not conservative as they were trying to sell the Mainland Sale to shareholders (& they succeeded).
The ongoing dividend will therefor be reduced compared to the last 2 years.
If the above points are are shown in future FSF reports to be correct we should see the share price after the Mainland capital return reducing by more than $2/share.

Well that my 2 cents worth, I'm sure this will not go down well with everyone.

Have a great Christmas.

 

"The ongoing dividend will therefor be reduced compared to the last 2 years. If the above points are shown in future FSF reports to be correct we should see the share price after the Mainland capital return reducing by more than $2/share."

Good summary but you didn't give a forecast for what you think future dividends will be and therefore yield based on SP

Quote from: Habitz on Dec 24, 2025, 10:56 PM........
Good summary but you didn't give a forecast for what you think future dividends will be and therefore yield based on SP

To be fair and honest there is a complex set of factors or say levers that maybe will come into play so I would suggest a prediction of future dividends is very much a moving target.

I speculate Tim has perhaps a more balanced outlook to what he had previously, perhaps he is ready to take some profits, personally I have said my bit on the thought that it's not a one way bet as Mr Market might be seeing it at present. There will be periods here the yields are looking large but suspect there are down years yet to endure, perhaps they will amount to times for buying opportunities to be had.

FY26 Q1 results were solid enough and Fonterra re-iterated its earnings range for continuing operations, post divestment, of 45-65c per share. Taking the mid-point of 70% of their 60-80% payout ratio and the 55c midpoint of earnings, then that's 38.5c per share, post divestment. If as expected the SP drops to say, $6, then that's good enough, in my view, to wait and see how the business develops.

Personally I think the pared-back business has a good chance of meeting or exceeding expectations, given that Fonterra will be more a more focussed entity  and the Ingredients Business has a higher return on assets than the soon-to-be divested consumer business ever managed. It all depends on Fonterra's ability to execute their strategy.
 
The ups and downs of milk prices aside, the dairy business is as about recession proof as any, so I'm happy to hold. That said, if the SP got close to $9 as we near payout date (some time away yet) then I'd be sorely tempted to cash up and eliminate the risk altogether. Another thought - Q2 results might also be out before payout date, so they could also provide some more data to aid decision making?

Quote from: Habitz on Dec 24, 2025, 10:56 PM"The ongoing dividend will therefor be reduced compared to the last 2 years. If the above points are shown in future FSF reports to be correct we should see the share price after the Mainland capital return reducing by more than $2/share."

Good summary but you didn't give a forecast for what you think future dividends will be and therefore yield based on SP

My post suggested FSF dividend will be highly correlated to WMPP, as this statistic has not been finalised for the 1/2 or full year you need to DYOR to determine EPS & DIV.

https://www.nzx.com/announcements/466421 (https://www.nzx.com/announcements/466421)

Capital return if approved will be paid in the first quarter of this year, plus 1H cash dividend (25 cents?) usually paid in April will be another nice top up

time for another DIM dividend prediction from TIM

1) Fonterra Prediction 45-65 (continuing operations) c/share earnings, mid point = 55 cents
2) Add Mainland contribution
   From last AR EBIT was 397/1838 (total) = 21.6%
3) Adjust Total EPS for mainland = 0.55 * 1.216 = 0.66 cents/share 
4) Dividend policy + (mid point) 0.7 * 66 c = 46 cents
5) Adjust for Inital/Final split from last year = (22/57) * 46 cents =17.7 cents
6) Adjuct for change to WMPP price (last 6 months/last full year)
   =0.928 * 17.7 cents = 16.4 cents
7) Apply Rounding = 16 cents/share initial dividend


Well there is another DIM dividend prediction, the last one was within a cent.

Special meeting coming up on Thursday that hopefully should result in the $2 per unit return of capital being confirmed. Requires 75% approval but one assumes Fonterra have done their homework.  ;)

Quote from: LoungeLizard on Feb 17, 2026, 12:30 PMSpecial meeting coming up on Thursday that hopefully should result in the $2 per unit return of capital being confirmed. Requires 75% approval but one assumes Fonterra have done their homework.  ;)

I did not vote. Vote closed on Tuesday? I was hoping to vote today.

Quote from: seaweed on Feb 19, 2026, 09:54 AMI did not vote. Vote closed on Tuesday? I was hoping to vote today.

I don't think our votes will shift the dial much, Seaweed. Should be a formality in any event ;)

Quote from: LoungeLizard on Feb 19, 2026, 10:08 AMI don't think our votes will shift the dial much, Seaweed. Should be a formality in any event ;)

Tried to vote on line but did not have my pin and password :(  ps my mistake. I was not meant to vote.

Quote from: seaweed on Feb 19, 2026, 10:43 AMTried to vote on line but did not have my pin and password :(  ps my mistake. I was not meant to vote.

Shame, your vote would have taken the decision result to 100% approval  ;)

Job done. Big payout coming unit holders way. What the SP will do after divestment is the $64k question. 

Quote from: LoungeLizard on Feb 19, 2026, 05:52 PMWhat the SP will do after divestment is the $64k question. 

Latest FSF update https://www.nzx.com/announcements/467839

Much will depend on whether  FSF are following the 'under promise; over deliver' mantra.  Later in the year, a timely upgrade, or a healthy bonus dividend from the divestment of Mainland,  could do wonders for the SP post divestment. Today's update is nicely conservative IMO.

"Fonterra's FY26 forecast earnings guidance from continuing operations remains unchanged at 45-65 cents per share. It is intended that Fonterra's dividend policy will be applied to these continuing earnings.
 
 "Our interim dividend from continuing operations will be confirmed when we release our FY26 interim results and an update on the special Mainland dividend will be given at this time," says Mr Hurrell.


Interesting times.

Mainlands underlying earnings will be paid as a special div, estimated at 14 to 18c for 7 months trading... not bad earnings for a business worth $2 to 2.50 per share. Gross up the half year and that's a high yield, up to 14 percent. But tell me where these numbers are wrong. I know fonterra receives about 4B and is paying out 3.2B. Is it fully tax paid div

Update this morning on mainland from Miles Hurrell
"As we close out our books for the first half of FY26 we can indicate that we expect to pay a special Mainland dividend in the range of 14-18 cents per share, which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices.�"

More good news! - special dividend of 14-18c. SP getting a boost on solid buying.

Quote from: LoungeLizard on Feb 20, 2026, 10:45 AMMore good news! - special dividend of 14-18c. SP getting a boost on solid buying.

WOW I didn't see this coming. This is a huge bonus to holders.

Quote from FSF release.

"We are currently finalising our interim accounts and can indicate that we expect the special Mainland dividend to be in the range of 14-18 cents per share, which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices."

If we look at Mainland dividend contribution from last year....

DIV = 57c/share
Mainland contribution = 21% or 12 c/ share
Adjust for dividend policy (80%) 12/0.8 = 15 c/share

This is for the full year & the special Div will be for perhaps 2/3 of the year (my assumtion of end march divestment date). So Mainland Group have significantly outperformed earnings  predictions this year. I would assume this will lead to further questions about the divestment from the doubters (non share holders).

On a side note the whole milk powder price has recovered well as stated by Big F.

https://www.globaldairytrade.info/en/product-results/whole-milk-powder/ (https://www.globaldairytrade.info/en/product-results/whole-milk-powder/)

Nothing but GOOD news today.

Quote from: Tim nice but dim on Feb 02, 2026, 10:45 PMtime for another DIM dividend prediction from TIM

1) Fonterra Prediction 45-65 (continuing operations) c/share earnings, mid point = 55 cents
2) Add Mainland contribution
  From last AR EBIT was 397/1838 (total) = 21.6%
3) Adjust Total EPS for mainland = 0.55 * 1.216 = 0.66 cents/share 
4) Dividend policy + (mid point) 0.7 * 66 c = 46 cents
5) Adjust for Inital/Final split from last year = (22/57) * 46 cents =17.7 cents
6) Adjuct for change to WMPP price (last 6 months/last full year)
  =0.928 * 17.7 cents = 16.4 cents
7) Apply Rounding = 16 cents/share initial dividend


Well there is another DIM dividend prediction, the last one was within a cent.

Time to update following Mainland special DIV annoucement.

As big F have been so generous with the SPECIAL I have assumed the top of the dividend policy (80%).


1) Fonterra Prediction 45-65 (continuing operations) c/share earnings, mid point = 55 cents
2) Add Mainland contribution
  From last AR EBIT was 397/1838 (total) = 21.6%
3) Adjust Total EPS for mainland = 0.55 * 1.216 = 0.66 cents/share
4) Dividend policy (high end) 0.8 * 55 c = 44 cents
5) Adjust for Inital/Final split from last year = (22/57) * 44 cents =16.98 cents
6) Adjuct for change to WMPP price (last 6 months/last full year)
  =0.928 * 17.7 cents = 15.76cents
7) Apply Rounding = 15 cents/share initial dividend


Not much change from the last prediction PLUS the SPEC @ 16 c means a great day for all holders.

How did the Mainland contribution go from 11c/share in FY 2025 to 16c/share for HY 2026.

August to December had falling commodity prices which Mainland benefitted from and margins increased dramatically is what I'm picking.

It'll be good timing for me to get the $2 but if the buyer Lactalis squeeze more profit out of the system they have got a bargain.

Quote from: Habitz on Feb 22, 2026, 10:35 AMHow did the Mainland contribution go from 11c/share in FY 2025 to 16c/share for HY 2026.

August to December had falling commodity prices which Mainland benefitted from and margins increased dramatically is what I'm picking.

It'll be good timing for me to get the $2 but if the buyer Lactalis squeeze more profit out of the system they have got a bargain.

Mainland result of 16 c will be for approx 2/3 of the year. Also when you adjust last years result for the 80% dividend policy this equates to 15c/share.

Still a significant outperform, eagerly awaiting the BIG F to explain why he result is so good. I'm sure Winnie will have something to say on the matter.

https://www.nzx.com/announcements/468837 (https://www.nzx.com/announcements/468837)

Confirmation of $2 per unit capital return on 14th April (record date 9th).

And still a good dividend and special dividend to come. SP on a bit of a roll.

Happy days ;D

Fonterra has over 4 Billion dollars in their bank account!!! They'd better not fall victim to any scammers. Have you thought about what you'll be doing with the cash LL

Quote from: LoungeLizard on Mar 09, 2026, 11:07 AMhttps://www.nzx.com/announcements/468837 (https://www.nzx.com/announcements/468837)

Confirmation of $2 per unit capital return on 14th April (record date 9th).

And still a good dividend and special dividend to come. SP on a bit of a roll.

Happy days ;D

Almost all the pieces are now on the board.

Still waiting on date for the SPEC, that will require settlement & auditing of the Mainland accounts upto 30 march 2026. I would not expect the SPEC dividend to go EX Dividend until the end of May.

SEE ....

https://www.nzx.com/announcements/467839 (https://www.nzx.com/announcements/467839)

"We are currently finalising our interim accounts and can indicate that we expect the special Mainland dividend to be in the range of 14-18 cents per share, which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices.

"This remains subject to the settlement date of the transaction and the finalisation of our financial statements and audit process."

Result out on Monday, not expecting any surprises. Will be interesting to see if they are  In a position to declare XD date on the Mainland SPEC dividend.

I have decided not to sell anything B4 the capital return due to the 3 ex dates for the interum, capital return & special dividends that is likely to complicate any prediction I make.

Lets see how things pan out.

Quote from: Tim nice but dim on Mar 21, 2026, 05:19 PMResult out on Monday, not expecting any surprises. Will be interesting to see if they are  In a position to declare XD date on the Mainland SPEC dividend.

I have decided not to sell anything B4 the capital return due to the 3 ex dates for the interum, capital return & special dividends that is likely to complicate any prediction I make.

Lets see how things pan out.

Likewise. Too much money coming shareholders way to walk away from now. A bird in the hand and all that.

Quote from: LoungeLizard on Mar 21, 2026, 06:02 PMLikewise. Too much money coming shareholders way to walk away from now. A bird in the hand and all that.

A few years back AIR sent me a 40c special div which included the normal div. from the sale of their share in another airline. The problem was the  sp dropped over a dollar in the following weeks. If they had split the special div in two and paid it out over 3 months it may have kept the sp a bit more stable Mabel. And the normal div paid out separate again to the special div. A good example is SEK with div in October then special div in January then another normal div in April. As for FSF it would be good to split the special div into two payments over a couple of months and pay the other divs separate again. Like you I will be holding out for the big div and all the littler divs. I think most shareholders will not want the sp to drop by $2. The YLD at $6.23 is about 9.1%. Hang in there fellow shareholders and looking forward to results tomorrow. :)       

https://www.nzx.com/announcements/469642 (https://www.nzx.com/announcements/469642)

Great result! 24c ord dividend and 16c special. Sorry Seaweed - Both paid on 14/4 as well as $2 per unit. Talk about a big payday!

Would be nice if the SP pushes forward as well - would give a bit more of a cushion when it drops after payday.

Quote from: LoungeLizard on Mar 23, 2026, 08:48 AMhttps://www.nzx.com/announcements/469642 (https://www.nzx.com/announcements/469642)

Great result! 24c ord dividend and 16c special. Sorry Seaweed - Both paid on 14/4 as well as $2 per unit. Talk about a big payday!

Would be nice if the SP pushes forward as well - would give a bit more of a cushion when it drops after payday.

WOW a $2.40 div :o

Quote from: seaweed on Mar 23, 2026, 09:10 AMWOW a $2.40 div :o

Great result.

"Fonterra delivers another strong result for HY26
 
 • Total Group revenue: NZ $13.9 billion, up by NZ $1.3 billion
 • Operating profit: NZ $1,231 million, up from NZ $1,107 million
 • Profit after tax: NZ $750 million, up from NZ $729 million
 • Earnings per share: 45 cents per share, up from 44 cents last year
 • Normalised earnings per share: 51 cents per share, up from 47 cents last year
 • Continuing Operations return on capital: 11.2% up from 10.4%
 • Interim dividend, fully imputed: 24 cents per share
 • Special Mainland dividend, fully imputed: 16 cents per share
 • Forecast Farmgate Milk Price range: NZ $9.40 - $10.00 per kgMS, with a midpoint of $9.70 per kgMS
 • Forecast milk collections: 1,565m kgMS, up 4%
 • FY26 full year forecast earnings range for continuing operations: 50-65 cents per share"


The divvies represent over 35% gross return on my av holding SP ...... Nice to be 'well positioned' what-ever the SP does after the payout. 

Indeed, I may well use my payout to buy more shares if the SP drops unrealistically. Interesting times.

Quote from: Left Field on Mar 23, 2026, 10:07 AMGreat result.

"Fonterra delivers another strong result for HY26
 
 • Total Group revenue: NZ $13.9 billion, up by NZ $1.3 billion
 • Operating profit: NZ $1,231 million, up from NZ $1,107 million
 • Profit after tax: NZ $750 million, up from NZ $729 million
 • Earnings per share: 45 cents per share, up from 44 cents last year
 • Normalised earnings per share: 51 cents per share, up from 47 cents last year
 • Continuing Operations return on capital: 11.2% up from 10.4%
 • Interim dividend, fully imputed: 24 cents per share
 • Special Mainland dividend, fully imputed: 16 cents per share
 • Forecast Farmgate Milk Price range: NZ $9.40 - $10.00 per kgMS, with a midpoint of $9.70 per kgMS
 • Forecast milk collections: 1,565m kgMS, up 4%
 • FY26 full year forecast earnings range for continuing operations: 50-65 cents per share"


The divvies represent over 35% gross return on my av holding SP ...... Nice to be 'well positioned' what-ever the SP does after the payout. 

Indeed, I may well use my payout to buy more shares if the SP drops unrealistically. Interesting times.

Yes, I have a similar "dilemma" with what to do with nearly $70k in dividends/capital return. I don't hold many NZ stocks now - too risky in my view, and getting riskier by the day - but Fonterra is one that I have held onto and I may, like you, buy more if the SP goes anywhere near $6. I believe Fonterra is actually a good defensive stock to hold (everyone needs milk) and as noted by Seaweed the yield could be near to 9% after the divestment. A good dilemma to have!

Quote from: LoungeLizard on Mar 23, 2026, 04:48 PMYes, I have a similar "dilemma" with what to do with nearly $70k in dividends/capital return. I don't hold many NZ stocks now - too risky in my view, and getting riskier by the day - but Fonterra is one that I have held onto and I may, like you, buy more if the SP goes anywhere near $6. I believe Fonterra is actually a good defensive stock to hold (everyone needs milk) and as noted by Seaweed the yield could be near to 9% after the divestment. A good dilemma to have!

Good to see you 'well positioned.'

It is all about balancing the risks in your own portfolio..... I'm underweight and profitable in FSF (with under 5% portfolio allocation,)  so more likely to take any future  low SP as an opportunity to double up for a longer term  10% hold and a hopefully strong future divvy yield in my increasingly defensive portfolio.



.

SP down to $8.05 since going ex-dividend. With the $2 return still to come (ex around 9/4) that may represent a buying opportunity depending on how one sees things playing out after the divestment?

Quote from: LoungeLizard on Mar 27, 2026, 12:47 PMSP down to $8.05 since going ex-dividend. With the $2 return still to come (ex around 9/4) that may represent a buying opportunity depending on how one sees things playing out after the divestment?

Im so happy after getting my last dividend prediction so VERY WRONG.

So what does this mean for future buying opportunities?

The dividend policy states "An interim dividend will not be more than 50% of the forecast total dividend and no more than net earnings at half-year."

So full year div will be at least 48 cents or an EPS of 60 cents minimum. With recent firming of WMPP price we should expect EPS of 65 cents per share or, top of the prediction at last years final result.

Nobody can predict what the share price will be after the capital return but an odds on bet will be a reduction in share price by $2.00.

How long will this take to recover?

Based on div 48 cents/share price $6.00 is a tax paid yield of 8.0% should see buyers lining up & a slow recovery. Best to have your 2 bucks in the bank IMHO.

$2.00 per share capital return dates announced....

https://www.nzx.com/announcements/470236

https://api.nzx.com/public/announcement/470236/attachment/465734/470236-465734.pdf

Trading halt will apply from market open on 8 April 2026 through until the close of trading on 10 April 2026. This is to ensure all trades have settled before the record date and to allow time to update Fonterra's share register.

Record date for being eligible for the capital return is 5.00pm on 9 April 2026 and the payment date is 14 April 2026.

Fonterra and Greenpeace settle over labeling - and the use of imported palm kernal feed.

https://www.fonterra.com/nz/en/our-stories/media/a-statement-from-fonterra.html

https://www.greenpeace.org/aotearoa/story/the-supermarket-trip-that-led-to-fonterra-admitting-its-100-new-zealand-grass-fed-claim-is-misleading-and-deceptive/

Payday tomorrow - Tuesday.

A billion dollar boost for the NZ economy (and a nice boost for my bank account.)

Yippee.

Very early in the days trading but looks like the hit was about $2.00 per share, interesting where it ends the day.

Hey Basil look at FSF. NTA is $8.19c, with 42.97 YLD. Is that tempting or not LOL.

Quote from: seaweed on Apr 13, 2026, 10:12 AMHey Basil look at FSF. NTA is $8.19c, with 42.97 YLD. Is that tempting or not LOL.

It is probably closer to 9.2% YLD at $6.40c. Correct me if I am wrong.

New appointment pleases me..... promotion from within.

https://www.nzx.com/announcements/470761

Fonterra names Richard Allen as new CEO
 
 Fonterra Co-operative Group Ltd has today announced the appointment of Richard Allen as its next Chief Executive Officer, succeeding Miles Hurrell.
 
 Chair Peter McBride says Richard is an exceptional leader who will bring to the CEO role a strong connection with farmer shareholders and customers and a deep knowledge of Fonterra's global operations and markets.
 
 "The Board is really pleased to announce Richard as Fonterra's next CEO, who will lead the Co-op into the next phase of its strategic implementation.
 
 "Richard is passionate about our Co-operative," says Mr McBride. "His most recent role is President Global Ingredients, responsible for Fonterra's Ingredients sales, optimisation, risk management, trading and global manufacturing.
 
 "He joined Fonterra as a graduate in 2008 and since then his career has spanned our global supply chain. He led our farmer facing business Farm Source for five years, has worked in China as Vice President of our Foodservice business, was the founding CEO of MyMilk, and more recently served as President Atlantic based in Chicago, responsible for relationships with a number of our global key accounts," says Mr McBride.

Down $2 per unit as expected. All going to plan (Fontera are targeting earnings to return to FY25 levels by FY28) then we should see that go up over time. And in the meantime, the expected yield on the current price is excellent. A long term hold for me.

Quote from: LoungeLizard on Apr 13, 2026, 10:49 AMDown $2 per unit as expected. All going to plan (Fontera are targeting earnings to return to FY25 levels by FY28) then we should see that go up over time. And in the meantime, the expected yield on the current price is excellent. A long term hold for me.

Am looking forward to big payout tomorrow. $3.2b floating around looking for a home. Maybe some might feed back into FSF and other companies. From memory Fonterra is holding back $1b for future investment.  FCG shares have gone the other way today up 25c.

Quote from: seaweed on Apr 13, 2026, 11:06 AMAm looking forward to big payout tomorrow. $3.2b floating around looking for a home. Maybe some might feed back into FSF and other companies. From memory Fonterra is holding back $1b for future investment.  FCG shares have gone the other way today up 25c.

Yes, $3.2b might give the NZ economy a bit of a sugar-hit for Luxon and co to take the credit for.
I would imagine some (including me) might be thinking of putting some of their payout back into FSF shares, which might give the SP a bit of a lift as well. 

Capital return has already hit the bank account. 40c dividend still to come. Happy days!

Quote from: LoungeLizard on Apr 14, 2026, 10:09 AMCapital return has already hit the bank account. 40c dividend still to come. Happy days!

YEP. Good stuff, no tax taken out. And yes another 40c to come :D 

https://www.nzx.com/instruments/FSF
Gross div yield showing 44%..........um, ok, lol.

Got both in my bank account now

Quote from: LoungeLizard on Apr 14, 2026, 10:09 AMCapital return has already hit the bank account. 40c dividend still to come. Happy days!

Well done holders!

I'm very happy I switched my free holding of ATM shares to FSF over 12 months ago,  (especially considering ATM's recent downgrade.)

 FSF now a conservative 5% of my portfolio with my average holding SP well below today's SP and prospects of above average dividend returns in the future. I'm looking to add more FSF in the months ahead and will possibly double my holding to around 10% of my portfolio.

Keeping my NZX portfolio  conservative in these difficult Trump times is working well.

ps encouraging to see FSF SP rising today on the back of FSF payout receipts.

pps. encouraged by today's SP support I've already increased my holding by 33%.

Am amazed about the late buying on high volumes after the 40c div is done and dusted. Confidence has / is returning, correct me if I'm wrong but the market has already recovered the 40cents?

Quote from: Habitz on Apr 14, 2026, 07:00 PMAm amazed about the late buying on high volumes after the 40c div is done and dusted. Confidence has / is returning, correct me if I'm wrong but the market has already recovered the 40cents?

It will be even nicer when/if the SP recovers the $2.00 payout as well!  ;) 

In the meantime happy to feed on the projected dividend yield  of over 12% (depending on your average SP holding cost.)

Quote from: Left Field on Apr 15, 2026, 12:30 PMIt will be even nicer when/if the SP recovers the $2.00 payout as well!  ;) 

In the meantime happy to feed on the projected dividend yield  of over 12% (depending on your average SP holding cost.)

What would be the lowest yield investors will pay for the units. Could a lower forecast gross yield of 8 or 10 percent be justified in the price. If so the SP has a way to go

Quote from: Left Field on Apr 15, 2026, 12:30 PMIn the meantime happy to feed on the projected dividend yield  of over 12% (depending on your average SP holding cost.)

I used to think this way but now I calculate my yields based on current share price as that yield will determine if you: BUY, SELL or HOLD.

What you paid for a share has not relevance the moment after the transaction is settled.

Anyway ..... price & volume have been very bullish after the two ExD dates better than I expected. Happy holder (regardless of what I paid for them)  ;D

Wow, look at FSF squirting away, as Trump would say milk baby milk. Two of my best preforming shares FSF and SEK. 8)  A big relief on the Snakes and Ladder board SPK being the snake last year.

Quote from: seaweed on Apr 16, 2026, 03:22 PMWow, look at FSF squirting away, as Trump would say milk baby milk. Two of my best preforming shares FSF and SEK. 8)  A big relief on the Snakes and Ladder board SPK being the snake last year.

Gained $1 back already..........wtf.

Quote from: alkebab on Apr 16, 2026, 03:37 PMGained $1 back already..........wtf.

Very happy I topped up on Tuesday,  and didn't wait.

Quote from: Left Field on Apr 16, 2026, 03:51 PMVery happy I topped up on Tuesday,  and didn't wait.

Likewise! Well on the way of recovering the $2 payout already!

Quote from: Left Field on Apr 16, 2026, 03:51 PMVery happy I topped up on Tuesday,  and didn't wait.

Where is this demand coming from? I can only assume from the likes of you & LL.

There is about $214 M from the capital return looking for a home, FSF shares purchased after the return now $13.7 M, so plenty of $$$$ left out there, don't expect demand to slacken off & well done to those who reinvested early.

I remember my 3rd & final purchase of this share.

It was March 2023 & decent dividends were starting to flow but the share price was still down the toilet @ $3.00. Whats more a capital return from the sale of Soprole amounting to  $1B had already been promised in the last annual report (50c per share), but still no punters were lining up for this bargain investment. I started to doubt myself, why was I the only one keen on departing with my hard earned cash?

In the end I left the flock paid my money, collected $1.00 dividends that year & have never looked back.

Well done Tim, Leaving the flock (and joining the herd) turned out to be a profitable choice

My level of fonterra shares has gone up and down since 2021. Currently sitting at a high level as had been waiting for this re-rating for some time. And not over yet

Good result...... the cunning plan is working.

https://www.nzx.com/announcements/473448

Sustained performance in Q3 as Fonterra executes on strategy; announces 2026/27 Farmgate Milk Price
 
 • Total Group operating profit: NZ $1.8 billion, up $103 million relative to prior year
 
 • Underlying earnings per share: 57 cents per share, up from 53 cents
 
 • FY26 full year forecast earnings range lifted and narrowed to: 60-70 cents per share, up from 50-65 cents per share
 
 • 2025/26 season forecast Farmgate Milk Price narrows: NZ $9.60-$9.80 per kgMS, from $9.40-$10.00, with the midpoint unchanged at $9.70 per kgMS
 
 • Announced opening 2026/27 season forecast Farmgate Milk Price of $9.75 within a range of $8.00 – $11.00 per kgMS
 
 • Season to date milk collections: 1,489m kgMS, up 4% on last season
 

Those of us who took the $2 gift-horse and held onto their shares are feeling pretty smug right now!

Quote from: LoungeLizard on May 28, 2026, 03:24 PMThose of us who took the $2 gift-horse and held onto their shares are feeling pretty smug right now!

Yes indeed. My 2 favorites in last 12 months FSF and SEK paid me just under $200k in divs over 2 days on 14+15/4/26. Am happy with that. 8) 

Quote from: seaweed on May 28, 2026, 04:30 PMYes indeed. My 2 favorites in last 12 months FSF and SEK paid me just under $200k in divs over 2 days on 14+15/4/26. Am happy with that. 8) 

Bloody hell, Seaweed, that's a serious return on your investment right there! Who dares wins eh?