Fonterra reveals huge loss for last financial year

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WELLINGTON, Aug. 12 (Xinhua) — New Zealand-based global dairy nutrition company Fonterra said on Monday it is set to lose between 590 million NZ dollars (380 million U.S. dollars) and 675 million NZ dollars in the just-completed financial year after writing down the value of more of its assets.

Its 800 million-NZ dollar debt reduction target was not achieved, according to a company statement.

Chief Executive Officer Miles Hurrell said that as a result of the full review of the business which has taken place across the year, as well as the work done so far to prepare its financial statements, it has become clear that Fonterra needs to reduce the carrying value of several of its assets and take account of other one-off accounting adjustments, which total approximately 820-860 million NZ dollars.

“Since September 2018 we’ve been re-evaluating all investments, major assets and partnerships to ensure they still meet the cooperative’s needs,” Hurrell said in the statement.

“We are leaving no stone unturned in the work to turn our performance around. We have taken a hard look at our end-to-end business, including selling and reviewing the future of a number of assets that are no longer core to our strategy,” Hurrell said.

The review process has also identified a small number of assets that are overvalued, based on the outlook for their expected future returns, he added.

“We’re in no doubt that farmers and unit holders will be rightly frustrated by these write-downs. I want to reassure them that they do not, in any way, impact our ability to continue to operate,” Hurrell said.

“Our cashflow remains strong, our debt has reduced … We remain on track with our other targets relating to reducing capital expenditure and operating expenses,” he added.

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