Fonterra Shareholders’ Fund (ASX: FSF) is a publicly listed fund in New Zealand and Australia, which gives the investors an opportunity to invest in the performance of Fonterra Co-operative Group. The units of the fund are listed on NZX and ASX which can be traded freely in an open market, in the same ways other listed securities are traded. The outside investors are not allowed to hold shares in Fonterra Co-operative Group, but they can invest in the units of the fund which gives them right and access, similar as those having a share in Fonterra Co-operative Group.
The company is an international dairy nutrition, owned by 10,000 farmers and their families. All the revenue from the exports are distributed to these 10,000 farmers. According to the company last year, it returned $10 billion to its New Zealand farmers. The group works closely with the farmers and encourage them to make sure they adopt good management practices, to continuously improve profitability and environmental efficiency. The sourced milk to all the markets has a minimum set of quality standards, that needs to be met by the farmers, in order to accept their milk, produced.
On 14th March 2019, the company announced its forecast on the Group’s milk collection. The group had reduced its forecast of milk collection from its farmers to 1,510 million kgMS for the 2018/19 season. The primary reason stated, was the impact of ongoing dry weather in New Zealand, particularly in the North Island, which was affecting the production in the second half of the season. Despite the reduced forecast, it was still higher than last season’s collections of 1,505 million kgMS, which was also impacted by poor conditions.
These adverse conditions are not expected to stay for the long duration. Therefore, the reduction in the forecast to offer lesser quantities for its product range, has been done for an upcoming 4 months only. There is no change in the forecast over the 12- month period for all products.
There were a lot of developments that took place in this month, within the company which is briefly discussed below:
On 13th March 2019, the Board of the Manager of FSF determined Andrew Webster Macfarlane, not being an Independent Director, in accordance with NZX Listing Rule 3.3.2.
On 8th March 2019, the recently appointed director, Andrew MacFarlane increased his stake in the fund by acquiring 122,150 ordinary units, through a separate entity, Pencarrow Farm Limited.
On 7th March 2019, FSF’s CEO, Miles Hurrell confirmed the appointment of Judith Swales as the COO, Global Consumer and Foodservice. Judith has been employed with Fonterra since 2013.
On 5th March 2019, the company notified, Miles Hurrell as its Chief Executive Officer with immediate effect, who has been an Interim CEO since August 2018.
On the technical front the stock traded 0.358% lower at A$4.18, as on 15th March 2019 (AEST: 3:55 PM) compared to the previous closing of A$4.19. In the last six months the stock is down by 8%, and its YTD return stands negative at 3.56%.
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