Latest / Early Edition with Ryan Bridge / Campbell Parker: DairyNZ CEO on Fonterra's positive annual result

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Campbell Parker: DairyNZ CEO on Fonterra's positive annual result · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So $ 2. 6 billion annual profit. This is Fonterra. $ 1. 2 billion
• 0:04
  Speaker 1: coming from the sale of the mainland brands to the French.
• 0:07
  Speaker 1: $ 20 billion being paid out this year. Not too worried
• 0:09
  Speaker 1: about El Nino yet.
• 0:11
  Speaker 2: They had a really good autumn, so there's quite a
• 0:13
  Speaker 2: bit of feed on farm that they can use if
• 0:16
  Speaker 2: we get a bit drier in the summer. And we've also,
• 0:18
  Speaker 2: as a cooperative, been through many droughts before in terms
• 0:20
  Speaker 2: of understanding how we need to adjust our plans.
• 0:23
  Speaker 1: Campbell Parker's with us, Dairy NZ CEO this morning. G'day, Campbell.
• 0:27
  Speaker 2: Morning, Ron.
• 0:27
  Speaker 1: You like the sound of that?
• 0:30
  Speaker 3: What's that? Good results.
• 0:31
  Speaker 1: Always good.
• 0:32
  Speaker 3: Yeah, always good for farmers and also good for the economy.
• 0:35
  Speaker 1: What about the return on capital? This is Judy who
• 0:38
  Speaker 1: likes to text our program. Good morning, Judy. Judy says
• 0:41
  Speaker 1: return on capital, 14.2%, way above the target, possibly one of,
• 0:45
  Speaker 1: if not the best return on capital of all the
• 0:48
  Speaker 1: large global milk cooperatives or companies.
• 0:52
  Speaker 3: Yeah, look, I think the results, you know, reflect a
• 0:55
  Speaker 3: strong strategy, but also execution. I mean, I go back
• 0:58
  Speaker 3: to Earlier this year, you know, moving product overseas was
• 1:01
  Speaker 3: pretty difficult with some of the challenges around. So I
• 1:04
  Speaker 3: think they've delivered a really strong result. And I think
• 1:06
  Speaker 3: it's positive for the reinvestment into, you know, continuing to
• 1:09
  Speaker 3: extract value for farmers.
• 1:11
  Speaker 1: The strong price that we have seen, and sure it
• 1:14
  Speaker 1: has dipped a bit, but it's coming back. How long
• 1:16
  Speaker 1: does the strong price last?
• 1:19
  Speaker 3: Well, I'm not an economist, Ryan, but if you look
• 1:21
  Speaker 3: through the cycle, you know, there's certainly been some structural
• 1:24
  Speaker 3: changes in demand for things like protein and the trends
• 1:27
  Speaker 3: around GLP-1 drugs globally. So the demand is strong. When
• 1:32
  Speaker 3: I talk to the people at Fonterra, demand for products
• 1:35
  Speaker 3: is strong, particularly across proteins, but also across fats. But again,
• 1:40
  Speaker 3: for farmers, we've been there before where the industry can
• 1:43
  Speaker 3: be cyclical. So farmers have got good, strong balance sheets
• 1:47
  Speaker 3: at the moment. I think the key thing is to
• 1:48
  Speaker 3: keep focused on doing what they do well and keep
• 1:51
  Speaker 3: control of costs because those margins are certainly getting tighter
• 1:54
  Speaker 3: as well.
• 1:55
  Speaker 1: Campbell, always good to chat. Campbell Parker, Darien's CEO.
• 1:59
  Speaker 3: For more from Early Edition with Ryan Bridge, listen live
• 2:02
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• 2:06
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