Fonterra increases distributable profit forecast

Fonterra says it has lifted its distributable profit forecast range for 2009/2010 to 40 to 50 cents per share, from the 35 to 45 cents per share forecast in December 2009.

There is no change to the target dividend range of 20 to 30 cents per share.

This would indicate 10 to 30 cents per share of distributable profit will be retained.

The forecast milk price of $5.70 per kilogram of milk solids (kgMS) for the current 2009/2010 season is also unchanged.

CEO Andrew Ferrier said the increase in the distributable profit range was driven primarily by gains arising from divestments, improved joint venture returns and lower funding costs through improved working capital.