Fonterra Raises Return on Capital Target and Dividend Policy

Fonterra Co-operative Group (NZX: FCG) has raised its target average return on capital to between 10% and 12%, an increase from its previous range of 9% to 10%. The company also updated its dividend policy, now aiming to distribute 60% to 80% of its earnings, up from the previous 40% to 60%. This shift is part of Fonterra’s broader strategy to strengthen its focus on the ingredients and food service sectors. Additionally, the dairy giant hinted at a substantial capital increase if it decides to sell its consumer business. Chair Peter McBride emphasized that Fonterra is committed to maintaining strong financial performance while exploring these opportunities.

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