Fonterra delays annual results reporting date to finalize accounts after write-downs

NEW ZEALAND – Fonterra has advised a change of date for reporting its audited financial results for the financial year ending 31 July 2019.

The dairy cooperative, which was previously expected to report the financial results on 12 September 2019, now says that it will release its results not later than 30 September 2019.

Last month, Fonterra announced a number of asset write-downs and one-off accounting adjustments, noting that the numbers remained subject to Fonterra Board reviewing the full financial statements and audit adjustments.

The farmer-owned cooperative announced it expected to report asset write-downs and one-off accounting adjustments of up to NZ$860million ($550 million) for the full year.

Fonterra now claims that it is working constructively with the Co-operative’s auditor PwC, through the normal financial year end accounts and auditing process and needed more time to complete the audit.

“Due to the significant accounting adjustments in FY19, as set out in the announcement on 12 August 2019, more time is required to complete the audited financial statements,” the company said in a statement. 

The dairy giant confirmed its previous announcement that it expects a reported loss of between NZ$590-NZ$675 million (US$377- 432 million) for the financial year under review.

Fonterra noted that the figures are are subject to the Board reviewing the full financial statements and to audit adjustments, and reflect the values attributable to equity holders.

The company maintains that the change in reporting date is unrelated to any discussions with the Financial Markets Authority, recent speculation about further material asset impairments, or other announcements.

The company said it was confident with its operation adding that the delay does not affect the Cooperative’s ability to operate and pay its bills, including paying farmers for their milk. 

Earlier this week, the Financial Markets Authority sought information from Fonterra after receiving a complaint about the write-downs.

Fonterra has maintained that the write-downs were in line with market disclosure obligations, and that its financial statements were independently audited.

Among the assets which could be further written down are Fonterra’s infant formula and dairy farm investments in China, its Chilean and Australian businesses.