ATM, FCG, SML: 3 NZX-listed dairy stocks to explore in June 2022

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ATM, FCG, SML: 3 NZX-listed dairy stocks to explore in June 2022

dairy stocks
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Highlights

  • NZ’s dairy sector deploys the latest techniques for milk production
  • The a2 Milk Company gets a new Chief Financial Officer
  • Synlait Milk post remarkable HY22 results

The dairy industry is one of New Zealand’s biggest earners and contributes significantly to the nation’s GDP. Its dairy sector is highly mechanised and boasts large-scale processing facilities.

Also, it deploys a substantial amount towards research and development for developing new and innovative products for the use of both its domestic and global customers. On average, it produces about 21 billion litres of milk every year and exports over 95% of the total milk produced worldwide.

Moreover, as per reports, the sector employed nearly 40,000 workers in 2020.

In the light of the given background, let us look at the three NZX-listed dairy companies worth exploring in June.

NZ dairy stocks - ATM, FCG, SML

Source: © Draghicich | Megapixl.com

The a2 Milk Company Limited (NZX:A2M; ASX:A2M)

First on the list is The a2 Milk Company Limited, which produces a wide range of milk products. Apart from New Zealand, its dairy products are sold across Australia, North America, Greater China and many other emerging markets across the globe.

Do Read: ATM, FCG: 2 stocks in focus as dairy prices may rise further

A few days back, the Company revealed that its Chief Financial Officer, Race Strauss, had stepped down from his position to pursue other interests. However, he would support ATM till FY22-end and ensure an orderly transition to a new CFO.

ATM has now appointed David Muscat as the new Chief Financial Officer. Meanwhile, Mark Sherwin will act as an Interim CFO till Muscat takes full charge of his role.

On 31 May, at the time of writing, ATM was gaining 0.19% at NZ$ 5.180.

Fonterra Co-operative Group Limited (NZX:FCG)

Second in line is Fonterra Co-operative Group Limited, which is NZ’s leading exporter of dairy products worldwide.

The Group released a communication from its Chairman to all its farmers regarding the implementation of its new Flexible Shareholding capital structure. The management is working towards putting additional arrangements to support liquidity in the FSM, i.e., the Fonterra Shareholder Market, as the Group transitions to a new capital structure.

Also Read: ATM, FCG, SML- Look at some popular dairy companies in New Zealand

The Board has set 1 May 2023 as a formal Compliance Date for the season pertaining to 2022/23.

Further, on 9 June, FCG will be conducting an online webinar regarding its Q3 financial performance, and a discussion will also be held on the working of the Flexible Shareholding capital structure once implemented.

On 31 May, at the time of writing, FCG was climbing 2.48% at NZ$2.480.

Synlait Milk Limited (NZX:SML; ASX:SM1)

Topping off the list is Synlait Milk Limited, which undertakes the latest and innovative farming practices to produce top-quality milk and dairy products.

Related Read: From KPG, RBD to OCA- 5 NZX small caps flying high in 2022

Last month, the Company announced HY22 results, wherein its NPAT grew 338%, and EBITDA climbed 45%, amounting to NZ$27.9 million and NZ$$68.4 million, respectively, as it resets its leadership and revamps its profitability as well as balance sheet.

Despite facing Omicron-related challenges, broader labour shortages, and disruptions to global supply chains, SML anticipates its NPAT to return to robust profitability in FY22, through retained cost savings and tighter management, among others, and is confident of enhanced levels of profitability and operating cash flows by FY23-end.

On 31 May, at the time of writing, SML was rising 2.04% at NZ$3.500.

Bottom Line

Despite COVID-19 volatility and challenging market conditions, New Zealand’s dairy industry has remained resilient and is focused on developing a new product pipeline to cater to a broader consumer base.

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