Council Comment On Fonterra’s Annual Result

21 July 2004

Shareholders’ Council Comment On Fonterra’s Annual Result

Fonterra Shareholders’ Council is encouraged by Fonterra’s announcement today of an increase in payout.

Fonterra has announced a final payout of $4.25 per kilogram of milksolids, a two cent increase from last month’s forecast. The result represents an increase of 17% on last season’s payout of $3.63 per kg/ms and is a 45 cent increase on the $3.80 payout forecast at the beginning of the season.

Shareholders’ Council Chairman John Monaghan said: “Farmers will be pleased to see an improvement in payout. As part of its performance monitoring role, the Council receives monthly updates on the company’s performance throughout the year. We have been greatly encouraged by the supply chain efficiencies and cost reductions that have been realised on the Ingredients side.

“Last year the Council expressed its disappointment with NZ Milk’s results and we have been keeping a close watch on its performance this year. While NZ Milk’s end year result is not unexpected, it falls short of what shareholders would have hoped for and this is clearly an area for improvement.

“We have been encouraged by progress on the value add side of the business and this is an area where shareholders would like to see further concerted growth. Fonterra is increasingly realising the benefits of the merger.”

ENDS

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