Fonterra units cut to ‘sell’ at Craigs on cost squeeze, earnings disconnect

Tue, 10 Dec 2013

Dec. 10 (BusinessDesk) – Units of Fonterra Shareholders’ Fund were cut to ‘sell’ from ‘hold’ by brokerage Craigs Investment Partners because of the ongoing squeeze of rising raw material costs and weaker prices for value-added products such as casein and cheese. Fonterra’s 2014 normalised earnings before interest and tax may fall 24 percent to $764 million, Craigs analyst Arie Dekker said in a report. The brokerage, which initiated coverage of New Zealand’s largest company in January, expects EBIT to grow longer term, reaching $1.6 billion in...

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