Archive | Fonterra

Fonterra bonds at 4.15%

Fonterra Co-operative Group Ltd set the interest rate for its issue of $100 million of 7-year unsubordinated, unsecured fixed rate bonds yesterday at 4.15%/year, a 1.35% margin over the underlying 7-year swap rate.

The bonds will be issued next Wednesday. There was no public pool for the offer.

Attribution: Company release.

Continue Reading

6 Fonterra Farm Source stores sell

Fonterra Co-operative Group Ltd has sold 6 Fonterra Farm Source stores around the North Island through a joint auction programme between Bayleys & CBRE head of agri-business Jeremy Keating.

Bayleys conducted the auctions in New Plymouth last Wednesday and in Hamilton & Rotorua on Thursday.

All sold with 8-year leasebacks to Fonterra subsidiary RD1 Ltd from settlement on 23 July 23, with 2-yearly cumulative CPI adjustments and reviewed to market on renewal & 2-yearly thereafter. Fonterra also has 4 3-year rights of renewal.

South of the Bombays

Bay of Plenty


Horomanga Rd (pictured):
Features: 4912m² site, 479m² longstanding store
Rent: $38,324/year net + gst
Outcome: sold for $400,000 at a 9.58% yield
Agents: Mark Slade & Mark Rendell



59-65 Orchard West Rd:
Features: 4555m² site on State Highway 2, 596m² store [corrected; originally written as 2596m²], 119m²  of canopies; purchaser will be required to outlay additional capital up to a maximum of $600,000 over the next 2 years for premises expansion, with a commensurate increase in rental
Rent: $124,750/year net + gst
Outcome: sold for $1.95 million at a 6.4% yield
Agents: Josh Smith & Jeremy Keating



64 Tasman St:
Features: 3054m² mainstreet (State Highway 45) location, 3 street frontages, 1125m² store, 145m² of canopies
Rent: $113,580/year net + gst
Outcome: sold for $1.25 million at a 9.1% yield
Agents: Alan Johnston, Iain Taylor & Jeremy Keating



104 Broadway:
Features: 2719m² site on State Highway 24, 1052m² store, drive-through access
Rent: $172,459/year net + gst
Outcome: sold for $2.61 million at a 6.61% yield
Agents: Blair Hutcheson & Jeremy Keating


178 Thames St:
Features: 2772m² site in the centre of town, dual street frontage, 1043m² store
Rent: $152,024 /year net + gst
Outcome: sold for $2.305 million at a 6.6% yield
Agents: Josh Smith & Jeremy Keating


14-20 Kensington St:
Features: 2313m² site close to town’s main roundabout, 1089m² store
Rent: $108,815/year net + gst
Outcome: sold for $1.385 million at a 7.85% yield
Agents: Blair Hutcheson & Jeremy Keating

Attribution: Agency release.

Continue Reading

Fonterra signs agreement for third China dairy farm

Published 20 July 2011

Fonterra Co-operative Group Ltd has signed an agreement to develop its third dairy farm in China, in a strategy to build a high-quality, sustainable fresh milk supply for customers in China.

The agreement announced yesterday, with the Government of Yutian County in Hebei Province, was to invest RMB260 million ($NZ47 million) in a 48ha farm which is expected to increase Fonterra’s overall milk production in China to around 90 million litres/year. Fonterra China president Philip Turner said: “The demand for milk in China is expected to triple over the next 10 years, and much of this demand is for liquid & fresh milk products. Our future in China is underpinned by our ability to grow high-quality local milk production for our customers and by playing a strong role in the development of the local dairy industry.” Fonterra International Farming Ventures chief operating officer Peter Moore said: “Our pilot farm project, established in Hangu in 2007, demonstrated we can successfully produce high-quality local milk profitably. The construction of our second farm in Yutian County is also progressing well. Today’s announcement of our third farm investment agreement is the next step in our plans to build a hub of farms in Hebei Province in the next 5 years.” The new farm will house about 3200 milking cows, which are expected to produce about 28 million litres of milk/year. The farm will be managed & audited according to Fonterra’s standards of excellence for milk production and will train & employ about 100 local staff. Farm construction will start in November and is expected to be completed by late 2012. Want to comment? Go to the forum.


Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Continue Reading

Fonterra to issue yuan-denominated bonds

Published 20 June 2011

Fonterra Co-operative Group Ltd plans to raise $56 million through a bond issue denominated in Chinese yuan. It said on Friday it would be the first corporate from Australia & or New Zealand to do so.

The issue of 300 million yuan ($US42 million) would be deliverable in Hong Kong. Fonterra’s treasury general manager, Stephan Deschamps, said the decision to enter the Chinese bond market reflected the growing importance of China to Fonterra’s business operations: “As our business with Chinese customers expands, it makes sense to seek a greater alignment between our treasury borrowing and our business activities.” He said the market in Chinese currency had grown significantly over the past year, reflecting the importance of China & its currency in the world economy & trade. The bond issue also represented a further diversification in Fonterra’s treasury strategy, which has debt denominated in $US, $NZ, euro, sterling & Japanese yen. Fonterra China president Philip Turner said the funds raised from the yuan bond issue would be used to support the growth of Fonterra’s China business, based in Shanghai: “Fonterra is growing very fast in China. We already have an established history working with local customers in China to grow & develop the dairy industry. “We see huge potential to expand the breadth of products we offer in China, as well as the geographical distribution of our consumer brands & foodservice dairy products.” Mr Turner said Fonterra would expand marketing, advertising & distribution of its consumer brands from 7 Chinese cities to more than 15 over the next 3 years. It was also rapidly expanding distribution of its foodservice products into tier 2 & 3 cities. “We are also exploring opportunities to produce & sell a range of premium value-added dairy ingredients for key customers on the ground in China. Fonterra is also developing its farm business in China.” Mr Turner said Fonterra forecasts showed the China dairy market was on track to triple in value from around $US22 billion in 2009 to $US70 billion by 2020. Want to comment? Go to the forum.


Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.


Continue Reading

Fonterra lifts payout forecast

Published 25 May 2011

Fonterra Co-operative Group Ltd lifted its profitability forecast for the 2011 financial year by 10c/share yesterday, but a lower opening forecast payout range for the next financial year.

The forecast payout range before retentions for 2011 is up 10c/share to $8-8.10, which would be a record. The opening forecast payout range before retentions for 2012 is $7.15-7.25 and the fair value share price has been held at $4.52 for 2012. The forecast milk price hasn’t changed.

Fonterra chief executive Andrew Ferrier said the updated forecast payout range for this year combined an unchanged forecast milk price of $7.50/kgMS and a forecast distributable profit range of $690-830 million, equating to 50-60c/share – 10c higher than the previous forecast in February. The target range for the dividend (to be paid out of distributable profit) is unchanged at 25-30c/share. The final payout will be confirmed when Fonterra announces its annual financial results in late September.

Want to comment? Go to the forum.


Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Continue Reading

Fonterra plans $300 million bond offer

Published 16 December 2008

Fonterra Co-operative Group Ltd said today it was considering raising $300 million, with the ability to accept oversubscriptions, through an offer of senior retail bonds. The offer is expected to open in early February.


Fonterra said it intended using any money raised for general business purposes, including working capital requirements.The company has appointed ANZ National Bank Ltd & BNZ Capital (a division of Bank of New Zealand) as joint lead managers for the offer.


Want to comment? Email [email protected].

Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.

Continue Reading

Fonterra increases 2008 forecast, cuts fair value share price

Published 2 June 2008

Fonterra Ltd has announced a 60c increase in the co-operative’s 2007-08 forecast payout to $7.90/kg of milksolids (kgMS) and a record opening forecast of $7 for next season.Fonterra signalled in April the potential for further upside in this year’s payout.Chairman Henry van der Heyden said the new forecast for the current season is made up of a milk price of $7.55 & a value component of 35c. He said this season’s payout would inject about $9 billion into the economy on top of 10,000 local jobs.Fonterra will announce its final payout for 2007-08 in September. Given the instability in the financial markets, the board has signalled the likelihood of retained earnings of about 30c/kgMS, but this wouldn’t be finalised until September.Fonterra’s fair value share price for 2008-09 has been set at $5.57, a fall of $1.22 on this season’s price of $6.79, partly because of the high commodity prices driving payout. This fall is broadly comparable with the drop in share prices in New Zealand over the past 12 months.The fair value share process takes into account all available & material information at the time the valuation is carried out, twice yearly, as opposed to listed shares that fluctuate throughout the year on their earnings & outlook.The independent valuer, Duff & Phelps, determined a range of $5.26-6.11 for the fair value share, with a mid-point of $5.68.Mr van der Heyden said the Fonterra board set the fair value share 11c below the mid-point of the valuation to reflect a one-off net cost to the co-operative of redeeming ‘dry’ shares (shares not backed by milk supply this season) due to the drought. He said the valuer wasn’t in a position to consider this at the time of the valuation. Mr van der Heyden said also continued to have a different view from the valuer on technical tax matters relating to the valuation.


Want to comment? Email [email protected].


Attribution: Company statement, story written by Bob Dey for this website.

Continue Reading

Fonterra lifts payout forecast again

Fonterra Co-operative Group has lifted its forecast payout for the season by 20c, from $3.85 to $4.05/kg milk solids. The payout forecast started at $3.50 kg/ms in March.

It’s also increased the advance payout rate for milk to $2.90 kg/ms. The higher advance rate will take effect on November 20.Fonterra chairman Henry van der Heyden said good market demand was supporting sustained strong commodity prices, leading to the revision.He said the improved price forecasts would help offset currency impact – Fonterra will convert its earnings this season at an average exchange rate of US60-62c compared to US52c last season.

Continue Reading