Fonterra released its financial report for the first quarter of fiscal 2023, raised guidance earnings, and lowered the expected purchase price of raw milk

The impact of the external environment and macroeconomics continues, and the cost of each link in the supply chain has increased, but in the long run, the development prospects of the dairy industry are still optimistic
.
As one of Fonterra's most important markets, Greater China earns solid
earnings.
On December 8, Fonterra released its financial results for the first quarter of fiscal 2023, raising its guidance earnings from NZ$0.
45-0.
60 per share to NZ$0.
5-0.
7 per share, and lowering the expected purchase price range of raw milk from NZ$8.
50-NZ$10.
00 per kg of milk solids, with the midpoint price of NZ$9.
00 per kg of milk solids and unchanged
advance interest rate.

"Globally, the overall supply of raw milk from major milk sources has shown a downward
trend over the past year.
Production in Europe and Australia continues to decline, while milk supply in the United States has improved
slightly in recent months.
New Zealand's raw milk production fell 2.
9%
from the same period last quarter.
"Miles Hurrell, Fonterra Group Chief Executive Officer, said that volatility in global markets has led to weaker demand for whole milk powder, including Greater China, which is also reflected
in the expected price of our raw milk purchase.
At the same time, the increase in market demand in some regions has somewhat offset the impact
of changes in demand in Greater China.
Although it is still early in fiscal 2023, we are confident
that future sales contracts will be concluded.

Hao Wanli said that the profitability of Fonterra's milk protein product line continued to be strong, especially the casein and caseinate products used in the medical nutrition field, which injected strong confidence
into our guidance income.
While the overall market for the Feedstocks business is volatile – which we expect to continue in the short to medium term, if the market volatility persists longer, it is likely to have an additional positive impact
on expected earnings.
Compared to the same period last year, Fonterra's foodservice business improved, but the rising cost of raw milk also put some pressure
on margins in the foodservice and consumer brands business.

He said Fonterra is making good progress
towards its 2030 strategic targets.
"In the future, we will focus on New Zealand's milk reserves and sell our operations
in Chile.
Recently, we published our Sustainable Finance Framework to ensure that our financing strategy is aligned
with the Sustainable Development Goals.
We are currently working with Nestlé to establish commercial net-zero carbon farms
in New Zealand.
In this five-year program, we will work to study all aspects of farm operations and support farms with proven technologies and innovative solutions already in place to achieve net-zero carbon emissions
.
We also plan to set new targets for Scope 3 (other indirect greenhouse gas emissions) to contribute to sustainable development
.
”

"In the first quarter of the fiscal year, the Greater China business continued to perform solidly
.
" Stephen Zhou, CEO of Fonterra Greater China, said, "More and more Chinese consumers are starting to pay attention to the balanced nutrition of their daily diet, which also brings us more new opportunities for future development, especially in segments
such as cheese.
”

(Liu Yanfang)

Preliminary review: Li Song Responsible editor: Xiao Zhihan Review: Ouyang Meihua