Fonterra to retain more profit rather than raise dividend (Update 1)

Fonterra to retain more profit rather than raise dividend (Update 1)

Watch a special Investing Report about Fonterra here Watch on YouTube here Fonterra has announced a 5 cent/kg of milk solid increase in its distributable profit forecast range for the current 2009/10 season to 40-50 cents/kg, but says it will leave the target dividend at 20-30 cents/kg, meaning it is increasing its targeted retention range by 5 cents to 10-30 cents/kg. (Update 1 adds video) The forecast milk Price of NZ$5.70/kg for the current 2009/2010 season is also unchanged, which means the forecast total payout to farmers is not forecast to change Fonterra Chief Executive Andrew Ferrier said the increase in the Distributable Profit range was driven mostly by gains from divestments, improved joint venture returns and lower funding costs through improved working capital. Fonterra is moving to reduce its debt in the wake of the global financial crisis and is trying to raise capital from its farmer shareholders, either through retention of parts of the milk payout or by selling new shares.

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