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ANZ analysts note that Fonterra has confirmed a record loss of $605m for the FY19 season in New Zealand with no dividend payment and a milk price of $6.35/kg milksolid (MS).  

Key Quotes

“The company has outlined its strategy to concentrate on its core function of manufacturing New Zealand milk into ingredients and food service products. It also has a focus on being more financially and environmentally sustainable.”

“The previous guidance for FY20 of a milk price in the range of $6.25 – $7.25/kg MS remains unchanged.   Earnings for FY20 are forecast to be 15-25c per share with a dividend guidance range reduced to 40-60% of earnings (previously 65-75%) indicating a dividend in the range of 6-15 cents.”