Cobram shares are trading nearly 3% higher on the day at $1.60 apiece after the business posted its FY24 results.

Whereas Fonterra is up less than 1% and trades at $4.03 apiece after the company provided its FY25 milk price update and FY24 earnings guidance.

Let's dive into what these 2 ASX agribusiness stocks posted today.

ASX consumer shares outshine

The ASX consumer share reported a 34.8% rise in revenue, reaching $227.8 million for the year, produced by a 35% growth in olive oil sales.

This grew net profits by 140% over the year to $18.5 million. Growth was underscored by a surge in packaged goods sales in both Australia and the US.

Growth was also fuelled by increased household penetration in Australia and expanded distribution in the US.

The company produced 13.3 million litres of olive oil across its operations, with the US crop of 3.2 million litres marking its largest harvest to date.

It is now "one of the largest olive oil producers in the USA".

The CEO and director's combined report highlighted the company's strong market position:

FY2024 was a pleasing year for the Company, characterised by the ongoing robust demand for our extra virgin olive oil ("EVOO"), as consumers continue to recognise its high quality and positive health attributes. During FY2024 the Company grew packaged goods sales in both the Australian and USA markets, with increased household penetration in Australia and growing distribution in the USA expected to strengthen our market position in future years, allowing us to capitalise on our growing olive oil supply from company-owned third-party olive groves.

Looking ahead to FY25, the ASX consumer share expects sustained strong demand for its products despite a global olive oil shortage.

Fonterra sees higher milk price

Fonterra shares are also in the green today after the company increased its FY25 milk price forecasts and FY24 guidance.

It raised Farmgate Milk Price estimates at the midpoint by 50 cents, now calling for $8.50 per kilogram of milk solids (kgMS).

The total forecasted range is $7.75 – $9.25 per kgMS.

The changes reflect the recent uptick in Global Dairy Trade (GDT) prices and "the strength of
the Co-op's balance sheet".

Additionally, the ASX consumer share updated its FY25 Advance Rate Schedule, allowing farmers to receive more payments earlier in the season.

The company also updated its FY24 earnings guidance. Fonterra now expects earnings from continuing operations to hit the top end of the previously announced range of 60-70 cents per share.

Management says this performance sets Fonterra up to pay a full-year dividend. The final earnings and dividend details are to be confirmed in September.

Fonterra's CEO, Miles Hurrell, stressed the significance of this uplift:

As we look to close out the books for the year, it's become clear that we have maintained strong performance across FY24.

We're indicating we expect our earnings to be at the top end of our forecast range and this puts us on track for a strong full year dividend.

Foolish takeaway

These 2 ASX consumer shares are on investors' radars today after posting positive updates.

Cobram shares have risen 33% in the past 12 months, whereas Fonterra shares have risen 42%.

The post 2 ASX consumer shares outshining after FY24 results appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is down over 10% to 17 cents. Investors have been selling off this struggling semiconductor's shares since Intel announced incredible new solutions in the same field as Brainchip. This adds to intense competition from a number of huge tech behemoths that spend billions on R&D each year. And with a lofty market capitalisation of $300 million, no revenue, significant ongoing cash burn, and a need for a capital raising in the near future, there could still be plenty more downside to come.

Evolution Mining Ltd (ASX: EVN)

The Evolution share price is down 3% to $3.34. This follows a pullback in the gold price overnight driven by rising bond yields and a stronger US dollar. It isn't just Evolution that is falling today. A number of gold shares are dropping with it. This has seen the S&P/ASX All Ordinaries Gold index fall 2%.

Fonterra Shareholders' Fund (ASX: FSF)

The Fonterra share price is down 10% to $2.98. This has been driven by the dairy company's shares going ex-dividend this morning. Eligible shareholders can now look forward to receiving this 31.3 cents per share dividend next month on 13 October.

Star Entertainment Group Ltd (ASX: SGR)

The Star share price is down over 16% to 62.7 cents. This morning, this casino and resorts operator announced the completion of the institutional component of its capital raising. Star raised a total of $565 million from investors at 60 cents per new share. This represents a sizeable 20% discount to its last close price. The company will now seek to raise $185 million via a retail entitlement offer.

The post Why Brainchip, Evolution, Fonterra, and Star shares are sinking today appeared first on The Motley Fool Australia.

Four ASX shares that have not let that hold them back are listed below. Here's why they are rising:

29Metals Ltd (ASX: 29M)

The 29Metals share price is up almost 8% to 70 cents. Investors have been buying this copper miner's shares after Morgan Stanley upgraded it to an overweight rating with an 85 cents price target. The broker made the move on valuation grounds and optimism over the Capricorn Copper restart.

Deterra Royalties Ltd (ASX: DRR)

The Deterra Royalties share price is up 3% to $4.96. This has also been driven by a broker note out of Morgan Stanley. Its analysts have upgraded this mining royalties company's shares to an overweight rating with a $5.50 price target. The broker believes that stronger-than-expected iron ore prices will boost the company's earnings.

Fonterra Shareholders' Fund (ASX: FSF)

The Fonterra share price is up 5% to $3.25. This follows the release of the dairy company's FY 2023 results. For the 12 months ended 31 July, Fonterra reported an 11% increase in total revenue to $26 billion and a 170% jump in total net profit to $1.6 billion.

South32 Ltd (ASX: S32)

The South32 share price is up almost 2% to $3.39. This morning, analysts at Ord Minnett upgraded this mining giant's shares to an accumulate rating with a $4.10 price target. As well as decent upside, the broker is expecting some big fully franked dividend yields in the coming years. Based on its estimates and the current South32 share price, Ord Minnett is forecasting a ~6% yield in FY 2024 and then a ~8% yield in FY 2025.

The post Why 29Metals, Deterra Royalties, Fonterra, and South32 shares are pushing higher appeared first on The Motley Fool Australia.

Four ASX shares are climbing more than most today are listed below. Here's why they are pushing higher:

Atlas Arteria Group (ASX: ALX)

The Atlas Arteria share price share price is up 16% to $8.27. This follows news that IFM Global Infrastructure Fund has acquired a 15% stake in the toll road operator at a significant premium to its last close price. This has sparked hopes that a takeover offer could be launched soon.

Boral Limited (ASX: BLD)

The Boral share price is up 14% to $3.27. Investors have been buying this building products company's shares after it appointed Vik Bansal as its new CEO. Mr Bansal stepped down from the role of CEO of Cleanaway Waste Management Ltd (ASX: CWY) last year amid a scandal which saw him accused of creating a culture of workplace bullying. This overshadowed an otherwise highly successful six years at Cleanaway.

Fonterra Shareholders' Fund (ASX: FSF)

The Fonterra share price is up 2% to $2.79. This morning the dairy co-operative announced plans to launch a $50 million on-market share buyback program. Management made the move on the belief that its shares are undervalued at current levels.

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy price is up 13% to 80 cents. Investors have been buying uranium shares on Wednesday after the industry was given a boost. This relates to news that the United States is seeking to wean itself off Russian uranium for its nuclear reactors. The Biden Administration has announced a US$4.3 billion plan to help with the transition.

The post Why Atlas Arteria, Boral, Fonterra, and Paladin Energy shares are pushing higher appeared first on The Motley Fool Australia.

Fonterra shares closed yesterday at $2.75 and are currently trading for $2.88.

This comes as the dual-listed dairy cooperative announces a major share buyback.

What was the share buyback announcement?

Fonterra shares are leaping higher after the company reported it is earmarking up to $50 million for an on-market share buyback program. The buyback is set to start at the end of the month, on 30 June.

The company said the buyback could run for as long as 12 months, with Fonterra buying shares at market price.

During that time Fonterra said it "will continue to assess market conditions, its prevailing share price, available investment opportunities and all other relevant considerations". Management retains the right to halt or cancel the program at any time.

The company will cancel all the shares its buys back. This will reduce the number of shares on issue, which should offer a tailwind for Fonterra stock.

Regulations limit the maximum number of shares the company can acquire to 5% of Fonterra's shares that were on issue 12 months ago. That works out to just under 80.7 million shares. That number also includes the $300 million on-market buyback (the 'Transitional Buyback') Fonterra announced last year to help the transition to a Flexible Shareholding capital structure. That process is still pending.

Regarding the new program, management believes the stock is undervalued at current prices, driving its decision for the buyback.

"The Co-op considers the prevailing price, particularly since late April, has undervalued Fonterra shares, which is a key reason for announcing this buyback," Fonterra chair Peter McBride said.

Fonterra share price snapshot

The Fonterra stock has struggled this year, down 19% since the opening bell on 4 January.

That compares to a year-to-date loss of 7% posted by the All Ordinaries Index (ASX: XAO).

At the current price, Fonterra shares pay a 5.8% trailing dividend yield, unfranked.

The post Fonterra share price surges on $50 million share buyback announcement appeared first on The Motley Fool Australia.

Within its results, Fonterra announced it's considering divesting its international operations, with Fonterra Australia potentially undergoing an Initial Public Offering (IPO).

At the time of writing, the Fonterra share price is $3.77, 3.29% higher than its previous close.

A quick note: Fonterra reports in New Zealand Dollars. All dollar amounts have been converted to Australian Dollars at the current exchange rate of AUD$1 to NZD$1.03.

Fonterra share price higher despite lower earnings

Here're the key performance metrics for Fonterra's FY21:

• $578.96 million of reported profits after tax, down $57.99 million on that of FY20.
• Around $20.4 billion of revenue, up 1% on the previous financial year's.
• Normalised earnings per share of 33 cents.
• 14 cent final dividend, bringing total dividends for FY21 to 19 cents.
• $11.21 billion of total payout to New Zealand farmers.

Over FY21, the average farmgate price of milk solids paid by Fonterra was $7.29 per kilogram.

Over FY21, the company reduced its net debt by $842.82 million. As of 30 June, it has around $3.67 billion of debt.  

Fonterra's divestment intentions

It might not be its earnings that have got the Fonterra share price in the spotlight today.

All eyes are on Fonterra following news it intends to divest its Australian and Chilean operations to focus on building its New Zealand business.

The company believes demand for New Zealand milk will increase from now until 2030 due to its quality and sustainability. However, it also expects the country's milk production to drop or remain flat.

Therefore, it plans to divest its Chilean dairy brand, Soprole, and its subsidiary, Prolesur. Fonterra will start the process to divest its integrated investment in Chile.

Meanwhile, the company is in discussions about the future of Fonterra Australia.

Fonterra stated Australia continues to be an important export market for its products and is considering what the best ownership structure will be for the business.

One option is to list Fonterra Australia, with Fonterra retaining a significant stake.

On the divestment intention, Fonterra's CEO, Miles Hurrell commented:

We see both these moves as critical to enabling greater focus on our New Zealand milk and, importantly, allowing us to free up capital, much of which is intended to be returned to shareholders.

Through its planned divestments and improved earnings, Fonterra intends to return around $966.5 million to shareholders by FY24. It also plans to have around $1.93 billion of additional capital available for investment in growth and further returns to shareholders.

Possible changes to shareholding structure

The company also released a proposed change to its shareholding structure today.

A new maximum shareholding requirement would be set at 4-times milk supply, compared to the current 2-times milk supply. This is intended to strike a balance between supporting liquidity in the farmer-only market while avoiding a significant concentration of ownership.

The company's also considering allowing more types of farmers to buy shares, extending exit provisions, and easing entry provisions.

The Fonterra Shareholders' Fund would also be capped and the Fonterra Shareholders' Market would continue to operate as a farmer-only market, but market participants won't be able to exchange shares into units in the fund.

The new structure is subject to shareholder approval.

What did management say?

Hurrell commented on the news driving the Fonterra share price today, saying:

Although the higher milk price and tightening margins put pressure on earnings in the final quarter, this is a strong overall business performance…

The work we've done as part of the 2019 strategic reset means we're well placed to take advantage of favourable industry dynamics. Growing global demand for dairy coupled with constrained supply has resulted in high prices for our milk. Our resilient supply chain has allowed us to get products to market and the healthy demand for our farmers' New Zealand milk has seen a record shipping year for the Co-op.

We've continued to reshape our business and the sales of our joint venture farms and wholly-owned farming hubs in China. Our continued focus is to get our New Zealand milk to the world.

What's next for Fonterra?

The Fonterra share price might be being boosted by its positive outlook for FY22.

Over FY22, Fonterra will be focusing on reducing its carbon footprint and returning value to its shareholders.

The company's earnings guidance for FY22 is between 24 and 38 cents per share – pretty much in line with its FY21 earnings.

It also reaffirmed its forecast farmgate milk price range is between $7.01 and $8.46 per kilogram of milk solids, with a midpoint of $7.73 per kilogram of milk solids.

Fonterra notes that New Zealand's dairy industry is the lowest carbon producing industry of its kind.

However, it will be working to reduce the methane output of dairy production through research and development initiatives.  

By FY30, the company wants to achieve average farmgate milk prices of between $6.28 and $7.25 per kilogram of milk solids for the decade ending FY30.

It also wants to increase its operating profits by 40% to 50% on that of FY21.

Fonterra share price snapshot

2021 hasn't been a good year for the Fonterra share price on the ASX.

It has fallen 10% year to date. However, it is 3% higher than it was 12-months ago.

The post Fonterra (ASX:FSF) share price gains amid profit slide and flagged Australian arm IPO appeared first on The Motley Fool Australia.

We take a look at the dairy co-operative's updated forecast for the farmgate milk price and its Q3 performance for the nine months ending 30 April.

What results did Fonterra report?

Fonterra's share price is moving higher after the co-op reported a 61% increase in normalised net profit after tax (NPAT) from the previous corresponding period. Normalised NPAT came in at $587 million. Fonterra credited its stronger balance sheet and improving underlying business performance for the boost.

Reported NPAT was $603 million, up 2% year on year.

Fonterra also reported an 18% year-on-year increase in its total group normalised earnings before interest and tax (normalised EBIT) of $959 million. It said lower operating expenses and higher margins helped drive the higher earnings.

Commenting on the results, Fonterra's CEO Miles Hurrell said:

Greater China continues to be an important performer for us, delivering year-to-date normalised EBIT of $457 million, up 30% or $106 million year-on-year. Foodservice, once again, was the big driver behind this result, contributing $93 million of the growth. In the third quarter, the team continued to improve the strong gross margins we saw in Foodservice at half year by shifting milk into higher value products, for example cream cheese. As a result, the year-to-date margin increased from 21.5% to 28.6%.

Regarding the balance sheet, Hurrell added:

Fonterra's operating expenses are down 5% year-to-date but we are planning some additional expenditure in the final quarter to support our brands and product initiatives for next year. Our debt reduction over the last couple of years and lower interest rates have reduced our interest bill by $69 million for the nine months ending 30 April 2021.

Looking ahead Fonterra maintained its normalised earnings guidance of 25 to 35 cents per share. The co-op noted that normalised earnings per share is currently sitting at 34 cents, but it expects the full-year results will fall in the middle of its guidance range as earnings come under some pressure during the fourth quarter.

Farmgate milk price update

Fonterra also revealed its opening forecast farmgate milk price range for the 2021–22 season. It forecasts a price of NZ$7.25–8.75 per kilogram of milk solids (kgMS), with a midpoint of NZ$8.00 per kgMS.

"Based on… supply and demand dynamics, along with where the NZ dollar is sitting relative to the US dollar, we're expecting whole milk prices to remain at current levels for the near future," Hurrell said.

Fonterra share price snapshot

Fonterra's shares have lagged the wider All Ordinaries Index (ASX: XAO) over the past year, up 5.3% compared to a 24.5% gain on the All Ords.

Year-to-date the Fonterra share price is down 15.2%.

The post Why the Fonterra (ASX:FSF) share price is moving higher appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

CSR Limited (ASX: CSR)

The CSR share price is down 3.5% to $5.88. This decline appears to have been driven by a broker note out of Ord Minnett this morning. According to the note, the broker has downgraded the building materials company's shares to a hold rating with a $5.50 price target. It made the move on valuation grounds following some strong gains.

Fonterra Shareholders' Fund (ASX: FSF)

The Fonterra share price is down 4.5% to $4.05. This morning the dairy company's shares returned from a trading halt after announcing the start of a consultation process. This process is seeking farmer feedback on potential options to change its capital structure. These changes could give farmers greater financial flexibility.

Nearmap Ltd (ASX: NEA)

The Nearmap share price has continued its slide and is down a further 5% to $1.72. Investors have been selling the aerial imagery technology and location data company's shares this week after it was hit with legal proceedings. The company advised that rival Eagle View alleges patent infringement in relation to its roof estimation technology. Nearmap has denied any infringement and will defend the complaint.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price has dropped 6.5% to $42.89. This is despite there being no news out of the healthcare technology company. However, with a number of shares on high PE ratios coming under pressure, it isn't overly surprising to see Pro Medicus trading lower. After all, its shares are currently changing hands for ~130x estimated FY 2021 earnings.

The post Why CSR, Fonterra, Nearmap, & Pro Medicus shares are dropping appeared first on The Motley Fool Australia.

Why the A2 Milk share price is on watch 

In a paper released on Wednesday, the People's Republic of China said that it should remove all birth control and encourage people to have more children. A number of China's listed dairy companies have worked with ASX-listed dairy companies. 

Beingmate for example, is one of the largest Chinese-owned companies in the infant nutrition industry. Its shares have climbed 10% today, but remain around all-time record lows.

In late 2020, Bubs Australia Ltd (ASX: BUB) entered a Memorandum of Understanding (MoU) with Beingmate to manufacture Bubs Goat Infant Formula made from 100 per cent Australian goat milk in China. Interestingly, Fonterra Shareholders' Fund (ASX: FSF) also has a 2.82% shareholder in the company. 

Elsewhere, shares such as Guangxi Royal Dairy, Lanzhou Zhuangyuan Pasture, and Xinjiang Tianrun Dairy have all opened higher on Thursday. 

A potential turnaround in the share price 

Bell Potter released a note on Monday, upgrading the A2 Milk share price to a buy with a $9.50 target price. The broker observes that the company is working through its excess stock and exports to China are picking up from December 2020 lows. It believes that these early signals could indicate that the recent downgrade cycle is reversing. 

The report also highlighted A2's expanding offline Chinese distribution. It believes that the company's distribution points are looking to approach 30,000 in the March quarter and might mitigate the headwinds of declining China births, which is down 15% year-on-year in 2020.  

Overall, Bell Potter is pointing to a recovery that's in its very early stages. Investors likely want to see a material improvement in the company's financial performance following back-to-back earnings downgrades. 

The post China's dairy stocks rise: What does this mean for the A2 Milk (ASX:A2M) share price? appeared first on The Motley Fool Australia.

One of the main highlights of the ASX was one of the big banks announcing that it was going to get involved directly in a buy now, pay later offering.

Here are some of the biggest news pieces from the ASX today:

Commonwealth Bank of Australia (ASX: CBA) to launch buy now, pay later product

Australia's biggest bank has announced that it's launching a buy now, pay later offering which can be used anywhere that Mastercard is accepted. Eligible customers will start being able to use it from mid-2021. There will be no ongoing fees for customers and it won't cost anything more than the standard merchant fees for merchants.

The big ASX 200 bank said that buy now, pay later average industry costs to businesses are around 4% per transaction and BNPL fees cost Australian businesses hundreds of millions of dollars a year.

CBA said that robust criteria will be used to approve customers based on specific eligibility and credit assessments.

It will be available alongside the existing Klarna BNPL offering which gives customers an integrated shopping experience, as well as offers and notifications.

Angus Sullivan, an executive from the retail banking services division said:

As the leading digital bank in Australia, we believe we are best placed to offer our customers a prudent and responsible BNPL option based on the trends and insights sourced from real time transaction data over many years.

Customer needs are evolving and this new BNPL offering is about giving customers more choice around how they choose to pay and when, depending on the option which suits them best.

When making a payment, customers will have additional flexibility to use it for their everyday spending for smaller purchases as well as split over four instalments to help smooth payments for bigger purchases.

Despite the news, the Afterpay Ltd (ASX: APT) share price ended up 1%, whilst the Zip Co Ltd (ASX: Z1P) share price fell over 1%.

Fonterra Shareholders' Fund (ASX: FSF)

Fonterra announced its FY21 half-year result today. It said that normalised gross profit was up 3% to $1.7 billion, expenses dropped 3%. This led to normalised earnings before interest and tax (EBIT) going up 17% to $684 million and normalised net profit after tax (NPAT) rose 43% to $418 million.

Whilst reported net profit was down 22% to $391 million, it was because last year's result included the gain from the divestments of DFE Pharma and Foodspring.

In regards to its outlook, the business said that its earnings performance is expected to come under significant pressure in the second half. Whilst the strong milk price is good for farmers, it is hurting Fonterra's margins. Normalised earnings per share (EPS) for the full year is expected to be 25 to 35 cents per share.

The Fonterra share price rose 1% today. 

Cimic Group Ltd (ASX: CIM)

ASX 200 engineering business CIMIC announced that the alliance that UGL is part of has reached a contract award with Rail Projects Victoria for the Gippsland Line upgrade.

This will deliver revenue to Cimic of approximately $124 million.

The upgrade includes second platforms, station improvements, tracks, signalling and level crossing upgrades.

UGL managing director Doug Moss said:

UGL is Australia's leading rail and infrastructure service provider with operations across the country. We look forward to improving services and safety for the people of the Gippsland region and Victoria.

The project is expected to begin in early 2021 and be completed by the end of FY22.

The Cimic share price fell 1.3% today. 

The post ASX 200 dips, CBA launches BNPL, Fonterra reports appeared first on The Motley Fool Australia.

Let's take a look at how Fonterra has been performing.

What's driving the Fonterra share price?

The Fonterra share price is on the rise despite the fund reporting a 5% decline in total revenue on the prior corresponding period (pcp) to NZ$9.9 billion. Gross profit, however, improved by 3% to total NZ$1.7 billion.

While reported net profit was down 22% on the pcp (NZ$391 million), normalised net profit came in at NZ$418 million, representing a 43% jump on the pcp. Similarly, earnings before income tax (EBIT), were down 18% on the reported numbers (NZ$657 million) but up 17% on the normalised numbers (NZ$684 million).

The normalised numbers reflect the underlying performance of the business. It does not take into account costs associated with the fund's divestment from Chinese dairy farms, which is still pending.

Breaking down EBIT by export region, we can see what helped to salvage Fonterra's results in the period and where its growth opportunities exist.

Normalised EBIT from Africa, the Middle East, Europe, North Asia, and the Americas was down 7% on the pcp. It totalled NZ$201 million. Asia Pacific (excluding China) normalised EBIT was up 9% to equal NZ$190 million. Normalised EBIT from Greater China was up an eye-watering 38% to total NZ$339 million. Over the period, 50.4% of all Fonterra's earnings came out of China alone.

Fonterra still forecasts the farmgate milk price to be NZ$7.30 to $7.90 per kilogram of milk solids (kgMS). Fonterra updated the market on this earlier in the month.

Earnings per share (EPS) for the fund are forecast to be between 25 and 35 cents. Fonterra will pay an interim dividend of 5 cents per share.

Words from the CEO

Fonterra CEO, Miles Hurrell, commented on the results, saying: 

While down on this time last year at a headline level, the 2020 financial year benefited significantly from the divestments of DFE Pharma and foodspring®.

Despite the major impact COVID-19 is having around the world, the Co-op is staying focused on what it can control – looking after our people, making progress on our strategy to drive sustainable value for New Zealand milk and remaining committed to our 2021 priorities. Those priorities are:

• Our Co-operative, which is about being there for farmers and employees;
• Performance, which is about hitting our financial targets; and
• Community, which is about exceeding customer expectations, supporting communities through our nutrition programmes and making New Zealand's low carbon farming model a powerful point of differentiation.

Mr Hurrell also said inventory was up on the pcp. He attributes this mostly to shipping delays resulting from the pandemic.

Fonterra background

Fonterra is the largest company in New Zealand (by turnover and market capitalisation) and one of the largest dairy producers in the world. In fact, 30% of all global dairy exports are produced by Fonterra. Around 11,000 New Zealand dairy farmers own Fonterra as a co-op.

It was created out of the deregulation of the New Zealand dairy industry. As it has near-monopoly status, it sets the price it will pay dairy farmers for its products. This is the farmgate price. The price is calculated using global dairy commodity prices. This is because Fonterra exports 95% of all its product.

Fonterra share price snapshot

Unlike other dairy producers, such as the A2 Milk Company Ltd (ASX: A2M) and Synlait Milk Ltd (ASX: SM1), the Fonterra share price is up on this time last year.

One year ago, the Fonterra share price was trading at $3.78 and soon after hit a 52-week low of $3.24. Investors having bought Fonterra shares this time last year would be sitting on a tidy 23.28% return on investment.

The post Fonterra (ASX:FSF) share price edges higher on half-year results appeared first on The Motley Fool Australia.

Investors continue to sell off various businesses on the share market. Volatility is rising again. 

Here are some of the highlights today:

ASX tech shares sold off again

The share prices of many ASX tech shares dropped again today in reaction to concerns about rising bond yields.

Looking at some of the biggest names, the Afterpay Ltd (ASX: APT) share price dropped 2.5%, the Xero Limited (ASX: XRO) share price fell 2.4% and the Zip Co Ltd (ASX: Z1P) share price declined by 5.25%.

Costa Group Holdings Ltd (ASX: CGC)

Food business Costa announced that it has signed conditional agreements to buy the farming operations of KW Orchards citrus farm and the packing operation called EJT citrus packing facility. Both of these assets are in south west New South Wales and are within the Sunraysia region.

This acquisition will increase Costa's citrus plantings in the Sunraysia region to around 700 hectares, with KW Orchards having 600 hectares of land of which 312 hectares is citrus planting and 45 hectares is wine grapes.

Costa said that KW Orchards has an attractive varietal mix well suited to the export market, and it will play an important role in our capacity to take further advantage of strong export demand.

The ASX 200 food business explained that the acquisition is expected to be slightly earnings accretive in 2021, with year on year yield growth providing forecast growth of earnings in future years.

The company has started a preliminary plan for making a large, advanced citrus packing facility in Mildura, Victoria, which is also located in the Sunraysia region. It will have the ability to pack both Costa and third-party volumes from the Sunraysia region.

Costa said that the acquisition brings the total farmland to 3,435 hectares in the South Australian Riverland and Sunraysia region.

This acquisition will be funded by debt facilities and is expected to be completed in late March 2021.

The Costa share price ended the day down 1.1%.

Worley Ltd (ASX: WOR)

The Worley share price fell around 0.2% today despite announcing a contract extension win.

Worley said that INEOS has extended its master services agreement for its Grangemouth, UK site where it produces core chemical products such as ethylene, polyethylene and ethanol.

The ASX 200 company will provide small capital engineering services for ongoing maintenance and upgrades to the INEOS assets.

Worley CEO Chris Ashton said:

Worley has been at Grangemouth for more than 20 years and this extension of our master services agreement reinforces the strong relationship the Worley team has developed with INEOS O&P UK. We look forward to continuing our relationship and helping INEOS O&P UK achieve its sustainability goals.

Fonterra Shareholders' Fund (ASX: FSF)

The Fonterra share price went up 1.5% today in reaction to an announcement about its farmgate milk price.

Fonterra said that it's lifting its forecast farmgate milk price to a range of NZ$7.30 to NZ$7.90 per kilo of milk solids, up from a range of NZ$6.90 to NZ$7.50 per kilo of milk solids.

This is due to consistent strong demand for New Zealand dairy, with global dairy trade prices continuing to rise since February.

The midpoint of the range, where farmers are paid at, has increased to NZ$7.60 per kilo of milk solids.

The post ASX 200 drops again, Zip sinks, Worley wins appeared first on The Motley Fool Australia.

This comes after the dairy co-operative lifted its Farmgate Milk Price for the second consecutive month. Fonterra last raised its forecast on 3 February.

Why did Fonterra raise its milk price forecast again?

Fonterra shares are gaining after the co-op raised its Farmgate Milk Price. The strong demand for New Zealand dairy is largely driven by increased demand from China.

In this morning's ASX release, Fonterra increased its 2020-21 forecast Farmgate Milk Price from NZ$6.90–7.50 to NZ$7.30–7.90 per kilogram of milk solids (kgMS).

Farmers receive the middle of this range, which has increased by 5.5%, from NZ$7.20 to NZ$7.60 per kgMS.

The co-op said its 60-cent price forecast range reflected "continued uncertainties in the global dairy market". Atop COVID-related uncertainties, milk supplies in the United States and European Union will begin to increase as their milking season starts up.

At the new forecast price, Fonterra said its milk price payments could contribute more than NZ$11.5 billion to the Kiwi economy this year.

Management commentary

Commenting on the increased in its price forecast, Fonterra CEO Miles Hurrell said:

We've seen Global Dairy Trade (GDT) prices continuing to increase since February when we last updated on our forecast Farmgate Milk Price and then this week there was the 15% increase in GDT prices.

It's very much a China demand led story but there is also good demand for New Zealand dairy across South East Asia and the Middle East.

Hurrell said China's rapid economic rebound from the pandemic has boosted dairy sales in the Middle Kingdom. Part of that increased demand comes from more focus on longer-life dairy products, like whole milk powder.

With a nod to the past year's COVID related supply disruptions impacting most commodities around the world, he added, "We're also seeing customers want to buy more of our products than usual to help mitigate the risk of global supply chain delays.

Fonterra will provide its full half-year financial results on 17 March.

Fonterra share price snapshot

The Fonterra share price has performed well over the past 12 months, up 29%. That compares to a 7% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date the Fonterra share price is up 14%.

The post What's lifting the Fonterra (ASX:FSF) share price today? appeared first on The Motley Fool Australia.

The ruling means, in practical terms, that Bega may use the Bega trademark on its products such as peanut butter and Vegemite, while Fonterra's licence on the trademark will continue on natural and processed cheddar cheese, string cheese, and butter.

Bega's counterclaim, which alleged multiple breaches of the licence agreement by Fonterra, was dismissed.

Response by both parties

In a statement released to the ASX, Bega said it was "pleased that its right to use its brand on [peanut butter and Vegemite] has been confirmed by the court."

René Dedoncker, managing director of Fonterra Australia, gave the following statement to Motley Fool Australia in response.

"We're pleased with the decision that Fonterra will retain exclusive licence for the Bega cheese brand for cheese and butter. We will continue to invest in the Bega brand because we believe in it."

"Although we're disappointed with the decision on the trademark claim, we are confident that we can work together with Bega Cheese Limited to continue to grow the value of the brand."

"We will review the judgement in the coming days and consider our options."

Background to the case

In 2002, Bega Cheese and Fonterra came to an agreement for Fonterra to licence the Bega trademark until 2026 – including blocks and slices of cheese, and Stringers.

According to the ABC, the deal was going well until Bega Cheese announced in 2017 it was buying a suite of Kraft products from Mondelez International Inc (NASDAQ: MDLZ). Subsequently, the Australian dairy manufacturer replaced the Kraft logo on these products with its own Bega logo.

During initial proceedings, Fonterra alleged Bega were "diluting the distinctiveness of the [Bega] brand" and would cause "significant damage to the existing reputation of the Bega trademarks."

Fonterra and Bega share price snapshots

Bega Cheese hit a 52-week high yesterday and this momentum has carried on into today. At the time of writing, the Bega Cheese share price was up on yesterday by 9 cents to $6.24.

Fonterra's share price has also risen today, up by 4 cents to $4.67. This rise has come off the back of a narrowed earnings guidance.

It is not yet clear whether today's court ruling will have any impact on each company's share price.

The post Court rules on Bega Cheese (ASX:BGA) and Fonterra (ASX:FSF) trademark dispute appeared first on The Motley Fool Australia.

The fund declared it would raise the bottom range of its previously forecast earnings per share – from 20–35 cents per share up to 25–35 cents per share.

Words from the CEO

Fonterra CEO Miles Hurrell stated the move would provide more clarity on its full-year earnings guidance. The fund's interim accounts are due for release on 17 March.

"That is why we have come out today with a narrower forecast earnings range of 25-35 cents per share, which still reflects the usual uncertainties we face over the course of any given year."

Hurrell added: "Despite the challenges and flow on effects of COVID-19, the team have remained committed and disciplined. There has been strong demand for the Co-op's New Zealand milk, and we've continued to get product to the market."

Fonterra's unique market situation

Fonterra was created out of the deregulation of the New Zealand dairy industry. The liberalisation process started when the New Zealand government stopped setting the price of dairy products in 1976. It concluded when dairy companies were allowed to set their own prices in 1993.

The fund is not just the largest dairy producer in all of New Zealand, by far, but the largest company in the Kiwi nation. It is a co-op owned by 11,000 dairy farmers.

30% of the entire world's dairy exports are produced by Fonterra. Brands familiar to Australians include Western Star, Mainland, and Perfect Italiano.

Because of the Co-op's extreme market power, it sets the price for dairy. With oversight from the New Zealand Commerce Commission, Fonterra declares the price it will pay dairy farmers for their products. Their last announcement lifted the farmgate price to NZ$6.70-7.30 per kilogram of milk solids.

The farmgate price is calculated by recording global prices for dairy commodities, such as skim milk powder and buttermilk powder, then deducting the costs of productions. The end result is price paid to farmers that is the highest possible, but which still leaves the dairy behemoth with adequate returns.

Fonterra uses export prices in this calculation as it sells 95% of its product overseas.

Many believe the high price New Zealanders pay for dairy products is a result of this system.

Fonterra's share price outlook

While flat yesterday (opening and closing at $4.63), the Fonterra share price has been on an upward trajectory for the last year.

One year ago, Fonterra shares were selling at $3.74 – an incredible 24% rise compared to the All Ordinaries (ASX: XAO), which gained just 1.3% over the same period.

The post Fonterra (ASX:FSF) share price on watch after narrowing earnings guidance appeared first on The Motley Fool Australia.

Why has the co-op raised its milk price forecast?

The Fonterra share price has failed to respond to this morning's announcement advising the co-op has raised its expected farmgate milk price for the 2020-2021 season from NZ$6.70–7.30 (AU$7.05–7.68) per kilogram of milk solids (kgMS) to NZ$6.90–7.50 per kgMS.

The company said the midpoint range, which is what farmers receive, had increased to NZ$7.20 per kgMS.

Explaining the roughly 3% increase in the milk price outlook, Fonterra's CEO Miles Hurrell pointed to strong demand for dairy. Global Dairy Trade (GDT) prices have continued to increase since Fonterra revised its milk price in early December.

According to Hurrell:

In particular, we've seen strong demand from China and South East Asia for whole milk powder (WMP) and skim milk powder (SMP), which are key drivers of the milk price.

This lift in our forecast Farmgate Milk Price is good news for New Zealand farmers. It would see the Co-op contribute almost $11 billion to the New Zealand economy through milk price payments this year, which helps support the wellbeing of rural communities.

New Zealand exports some 95% of its milk production, with Fonterra playing a large role in collecting the milk. That lack of domestic competition for supply means there is no set market price for dairy.

For this reason, Fonterra calculates a farmgate milk price. This enables total returns to be distributed between payments for milk and returns on the share capital invested by shareholders.

With a nod to various uncertainties remaining in the year ahead, Hurrell added:

Now that we're through the peak of the 2021 milking season, the impact of any changes in global market dynamics is reducing and our view of the season is firming up. However, we are continuing to keep a close eye on a number of factors. These include New Zealand weather conditions, expected challenges from further waves of COVID-19 and increasing milk production in the Northern Hemisphere.

Fonterra is due to announce its half year results on 17 March, when the Co-op will also offer updated full year earnings guidance.

Fonterra share price snapshot

The Fonterra share price has remain unchanged by today's announcement. This compares to a 1.9% gain on the All Ordinaries Index (ASX: XAO).

Over the past 12 months, however, Fonterra shares are up 10.4%, easily outpacing the All Ords 0.9% gain in that same time.

Based on the current Fonterra share price of $4.25, the co-op pays a 0.9% dividend yield, unfranked.

The post Fonterra (ASX:FSF) share price in focus after boost to forecast milk prices appeared first on The Motley Fool Australia.

Gold miners rise again

Over the past couple of weeks the share prices of ASX 200 gold miners have been rising as other shares like the FAANG stocks have dropped.

Looking at today's ASX 200 movements:

The Saracen Mineral Holdings Limited (ASX: SAR) share price went up 4.2%, the Perseus Mining Limited (ASX: PRU) share price rose by 3.3%, the Evolution Mining Ltd (ASX: EVN) share price grew 1%, the Gold Road Resources Ltd (ASX: GOR) share price rose by 3%, the Resolute Mining Ltd (ASX: RSG) share price climbed 1%, the St Barbara Ltd (ASX: SBM) share price rose 1.5% and the Silver Lake Resources Ltd (ASX: SLR) share price rose 2.9%.

Today's biggest declines

The share price of AMP Limited (ASX: AMP) dropped by 8% today after it went ex-dividend with its special dividend. It was the worst performer in the ASX 200.

There were other large declines with the Unibail-Rodamco-Westfield CDI (ASX: URW) share price falling 7.3%, the Abacus Property Group (ASX: ABP) share price dropped 4.3%, the Virgin Money UK CDI (ASX: VUK) share price declined 4.1% and the Qube Holdings Ltd (ASX: QBE) share price fell 2.6%.

Clover Corporation Limited (ASX: CLV)

The Clover share price fell over 8% today after reporting its FY20 result.

Sales revenue increased by 15.1% to $88.3 million. Management said that there was growth across all of its markets. The Australian, New Zealand and Asian markets continued to show growth, driven by infant formula demand and increased interest in the health benefits of omega 3 fatty acids resulting in new customers creating new products for the food and nutraceutical sectors.

Clover said the European Union market has grown substantially as new and existing infant formula manufacturers adjust their formulations to meet the new EU standard for infant formula since February 2020. The leadership said the USA has shown promising growth, with many projects on hold due to COVID-19 impacts.

Clover's earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 35% to $18.9 million, net profit before tax rose by 26% to $17.7 million and net profit after tax jumped 23.8% to $12.5 million. Earnings per share (EPS) increased by 22.7% to 7.51 cents.

The ASX share's board decided to increase the final dividend by 5% to 2.5 cents

Clover said it benefited from pantry stocking during the third and fourth quarter of FY20. Though it's seeing demand normalise now.

The company said its balance sheet remains strong with net debt of $5.4 million.

Clover also explained that it invested in a new company called Melody Dairies in 2019 which has built a new nutritional spray dryer in New Zealand during 2020. Clover owns 42% of the company and has access to 42% of its capacity to manufacture its products.

The construction of the spray dryer is complete with qualification trials progressing well. However, customer audits have been impacted by COVID-19 preventing travel, which will slow production volume initially.

Fonterra Shareholders' Fund (ASX: FSF)

Fonterra reported its FY20 result today to the market.

It said that it generated profit after tax of $659 million, up $1.3 billion. Normalised profit after tax came in at $382 million, up $118 million.

Group earnings before interest and tax (EBIT) was $1.1 billion, up $1.2 billion from the previous year. Fonterra generated normalised EBIT of $879 million, up $67 million.

Normalised gross profit grew by $200 million to $3.2 billion. Normalised operating expenses dropped by $14 million to $2.3 million.

Fonterra generated free cashflow of $1.8 billion, up $733 million. This helped reduce net debt by $1.1 billion over the year to $4.7 billion.

Fonterra Chair John Monaghan said: "This year marks a return to paying dividends, a position we expect to maintain in the future, assuming normal operating conditions.

"At 5 cents per share, the dividend is at the lower end of the 5 cent to 7 cent range calculated under the board's dividend policy guidelines."

In FY21, Fonterra is expecting earnings to be between $0.20 per share to $0.35 per share. For context, FY20 earnings per share (EPS) was $0.24. The business reaffirmed its FY21 farmgate milk price range of $5.90 per kgMS to $6.90 per kgMS.

The post ASX 200 drops 0.3%, gold miners keep rising appeared first on The Motley Fool Australia.

What was in the announcement?

The Fonterra Shareholders' Fund had revenue of NZ$6 million in the year to 30 June 2020 (FY20). Its FY20 net profit was nil. 

According to the fund's FY20 report, Fonterra Cooperative Group's reported net profit after tax was NZ$659 million, up NZ$1.3 billion compared to the prior year. The report stated that the underlying business performance improved, with Fonterra's food service business having a significantly better first half, especially in Greater China. However, this improved performance was partially offset by the disruption caused by COVID-19.

Fonterra's consumer business performance was down compared to the prior year. This was attributed to business disruptions in Hong Kong and Chile, and impairments to the company's Chesdale brand and goodwill in the New Zealand consumer business. 

Free cash flow for the Fonterra business increased by NZ$733 million during FY20 to NZ$1.8 billion. This was achieved through a combination of improved earnings, lower capital expenditure and the sale proceeds received from the divestment of DFE Pharma and Foodspring, along with a reduction in the company's Beingmate shareholding.

The Fonterra Shareholders' Fund announced a final dividend of 5 NZ cents per unit, which is unfranked. The ex-dividend date is 24 September 2020.

Outlook for FY 2021

According to the report, there is a high level of uncertainty for Fonterra entering the 2021 financial year due to the global recession and the potential for new waves of COVID-19 to affect the dairy industry. However, Fonterra's CEO, Miles Hurell, has stated that he intends to keep to the group's current strategy, which includes spreading its reach in global markets.

About the Fonterra Shareholders' Fund share price

The Fonterra Shareholders' Fund is a managed investment scheme that allows shareholders to invest in the performance of the Fonterra Co-operative Group, which is listed in New Zealand.

The Fonterra Shareholders' Fund share price is up 26.87% since its 52-week low of $2.94, however, it is down 7% since the beginning of the year. 

The post Fonterra Shareholders' Fund (ASX:FSF) share price higher after annual result appeared first on The Motley Fool Australia.

The broader All Ordinaries Index (INDEXASX: XAO) also posted strong gains, closing 0.60% higher at 6,853.20 points.

It was also a good day for most of the ASX major sectors, led by Utilities (+1.64%) and Communication Services (+1.09%).

Information Technology (-0.82%) and A-REITs (-0.41%) were the only ASX 200 sectors to close lower on Wednesday.

Here's a look at 3 of the biggest news items and events you missed on another big day of trade in Aussie equities.

1. Webjet shares led the ASX 200 gainers with 9.61% surge

The Webjet Ltd (ASX: WEB) share price rocketed 9.61% higher yesterday to head up the ASX 200 leaderboard on Wednesday.

Webjet shares surged on the group's response to media speculation about a potential takeover. Management didn't deny the rumours that the business is being shopped around to overseas investors by investment bankers.

This non-response of sorts seemed to have buoyed speculators to buy the stock and drive it higher on Wednesday.

2. Graincorp share price falls as new CEO announced

The Graincorp Ltd (ASX: GNC) share price fell 0.78% lower to $7.64 per share on Wednesday after the ASX 200 company unveiled its new CEO.

Graincorp announced Robert Spurway to be the new CEO following its planned malt business demerger in 2020.

Mr. Spurway is currently COO of Fonterra Shareholders' Fund (ASX: FSF) and has over 25 years experience in food and dairy.

However, the ASX 200 agriculture stock continued to slide lower on Wednesday and is down 15.39% this year.

3. WAAAX stocks slump lower in bad day for tech 

The 'WAAAX' group of Aussie tech stocks had a difficult day as the Information Technology sector slumped lower.

Altium Limited (ASX: ALU) shares fell 2.56% lower after Goldman Sachs moved the ASX 200 tech stock to 'Neutral' on Wednesday.

It was a similar story for the rest of the group with Appen Ltd (ASX: APX) falling 2.03% and the others down 1–2% yesterday.

The post 3 ASX 200 events you missed on Wednesday appeared first on The Motley Fool Australia.

Here's a short recap of the Australian market:

• S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) lower 0.57% to 6,710.20
• ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) lower 0.61% to 6,814.70
• AUD/USD at US 68 cents
• Gold at US$1,528.37 an ounce
• Brent Oil at US$62.59 a barrel

The best-performing ASX 200 share today was the Afterpay Touch Group Ltd (ASX: APT) share price. It finished 13% after a broker upgrade and an AUSTRAC update.

The falling oil price caused the Beach Energy Ltd (ASX: BPT) share price to decline by 5.6%.

Global news is having a negative effect on businesses that are affected by what's going on in the world. The Magellan Financial Group Ltd (ASX: MFG) share price fell 4.7% today.

Another of the biggest falls today belonged to the Pro Medicus Limited (ASX: PME) share price which dropped 5.4%.

The share price of Fonterra Shareholders' Fund (ASX: FSF) rose 0.3% after announcing it had achieved a $1 billion debt reduction.

The 1300 Smiles Limited (ASX: ONT) share price fell 0.3% as it reported it was looking into a potential large acquisition.

The share price of Kelly Partners Group Holdings Ltd (ASX: KPG) rose around 10% after making an acquisition announcement.

Finally, the share price of Bingo Industries Ltd (ASX: BIN) fell 4% after announcing it has agreed to sell Banksmeadow facility to CPE Capital for $50 million.

Here are some of today's top stories:    

• How many of these financial bucket list items can you tick off?
• 5 stocks to buy under $5
• Should you help out a friend with money?
• 3 reasons why I think Altium is the best ASX growth share to buy

The post ALL ORDINARIES finishes lower Wednesday: 8 ASX shares you missed appeared first on The Motley Fool Australia.