Fonterra, despite facing a significant 70% drop in half-year profit after tax, is optimistic about the resilience of its Australian business.
The dairy cooperative highlights the robustness of its Australian arm, emphasizing solid fundamentals despite a decline in earnings.
For the six months ending January 31, Fonterra Australia reported a gross profit of $138 million, marking a 19% decrease compared to the corresponding period last year. Earnings before interest and taxes (EBIT) experienced a sharp 43% decline, reaching $42 million, while profit after tax plummeted from $69 million last year to $21 million this year.
Rene Dedoncker, managing director of Fonterra Australia, underscores the profitability of its Australian operations amidst favorable domestic demand. He notes, “We continue to see value growth in Consumer and Foodservice sectors.”
Dedoncker highlights the enduring success of Fonterra’s Consumer brands, maintaining leadership positions in butter & spreads and cheese categories despite shifting consumer preferences towards private labels and lower-priced alternatives.
Acknowledging the subdued out-of-home demand in the Foodservice sector due to prevailing macroeconomic conditions, Dedoncker stresses the company’s commitment to delivering exceptional customer experiences, contributing to its sustained No.1 ranking in the Foodservice Advantage Survey for the fifth consecutive year.
Furthermore, while acknowledging the challenges faced by many dairy processors in the Australian market, Dedoncker affirms Fonterra’s dedication to cost reduction and capital optimization. The company is actively pursuing initiatives to enhance operational efficiency and drive cost savings.
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