Fonterra's 'skeletons uncovered' as it predicts loss of $590-675m for year

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Fonterra's 'skeletons uncovered' as it predicts loss of $590-675m for year

Fonterra's financial skeletons are now being exposed, Canterbury dairy farmer Tom Mason says. He said the dairy giant's announcement that it expects to make a reported loss of between $590 million and $675m this financial year, taking into account likely write-downs, was "a disaster".

The announcement comes in advance of the annual results due next month. Last year New Zealand's largest company made its only ever loss of $186m.
Fonterra chief executive Miles Hurrell said as a result, it would not pay a dividend for the 2019 financial year. This is a first for the co-op since 2002.

Canterbury farmer Tom Mason says Fonterra's announcement is disastrous.

Federated Farmers vice-president Andrew Hoggard asked "how the hell did we get here" so that it had now had to turn "the whole bus around". Mason said the expected annual result was the legacy of  the last 18 years where the ambitions of the organisation had not been matched by its ability and capital structure.

"There are plenty of grey hairs like me who remember the promise of 15 per cent a year growth and a $40 billion company. We had a merger that was sold on the basis of growth and they've not delivered at all. It's a disaster."Mason said questions needed to be asked about what he believed to be a "cosy" relationship between Fonterra and auditor PWC.
"Maybe there wasn't so much scrutiny around that auditing process as there should have been," Mason said. Mason said his four family farms were in a worse situation now than previously, when he had supplied 60 per cent of his milk to Synlait and 40 per cent to Fonterra.....


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