Shareholders’ Council Comment On Forecast Payout Thursday, Feb 13, 2003
Fonterra’s reduced forecast is “disappointing but understandable,” Shareholders’ Council chairman Tony O’Boyle said today.
“Farmers are naturally extremely disappointed but it appears that the forecast budgeting is now more robust and we welcome that,” said Mr O’Boyle.
“What is also important to note is that there are some positives in the result which suggest better returns over the medium to long term. Costs are down and we also have independent verification of the merger benefits flowing through.
“It’s also important to note that record sales volumes will result in the clearing of all surplus inventories. This is extremely positive and it’s no coincidence that the markets have lifted as a result.
“We would expect that this stock clearing will result in a certain amount of debt reduction and ultimately a strengthening of the balance sheet,” he said.
“However despite these positives the result is very disappointing. The Council will be increasing the pressure on the Board to bring costs down even further,” he added.
Mr O’Boyle said his comments were based on a preliminary review of the result, but the Shareholders’ Council would be undertaking a comprehensive review and would report in more detail to shareholders in the near future.