The Country 25/09/24: Miles Hurrell talks to Jamie Mackay

Published Sep 25, 2024, 2:05 AM

The chief executive of Fonterra, aka the Six Million Dollar Man, reviews a very good FY24 result for the dairy co-op.

Yes, I've jokingly referred to him as the six million dollar man. His name is Miles Hurrel, the chief executive of Fonterra, will come back to his pay, which, to be fair, he has probably earned miles. You announced your financial year twenty four results this morning. They were good. The big number for me wasn't about the twenty three twenty four year. It was about the milk forecast price for twenty four to twenty five, starting with a nine. How good?

Yeah, good, O, Jamie. No, it is good, and I think it reflects that we start to see China re emerge on GDT and even even the Pulse survey overnight sorry Pulse GDT overnight gave gave some more signal that they're in the market. So yeah, we feel good about that. You could argue that that we started the season in a bit more cautious, and I think you and I talked about that quite a bit. We now sort of back a balanced space, so we just need to be cautious that you know, if the market does come off, we may need to reflect that downwards over time. But as we sit there today, it's a great news story for the year ahead for our farmers.

That's a great number. What are you going to do with your nearly one point two billion dollar profit.

Yeah, we've got a significant capital plan that we've you know, we've got underway at the moment where it be decarbonization that that's well advanced. We also announced recently UHT plant of Edendale. We've also announced the Studdom upgrade and of course the recent foty row a warehouse that were course Stolles that were put in place. So we have we have significant capital plans that we have. So it's nice to be able to give a decent dividend this year fifty five cents, which is up on last year special dividend in there as well to recognize that we have had some lean years in the past that we didn't pay any dividends, so we need we should recognize that on the back of a very good year and in fact, they're balance sheets in good space, but we should we shouldn't also hire the fact that we do have a decent capital plan that we need to invest in if we're going to continue to grow well.

With this special dividend included in there, you're at fifty five cents. I did some rough back of the envelope calculations here in the studio. Your share price when I had a look just before midday three dollars sixty three up thirteen cents or thirteen cents nearly four percent. But if I take your fifty five cent dividend, divide it by three dollars sixty three, I get a yield of about let me have a look about fifteen percent. That's a great return on investment.

It's a great You're right, it is a great investment. I mean, ultimately it's shar Hills will determine what that price is, tossume how much they want to buy and sell. But yeah, I sit here and look at it too and think it is a good deal. Thing I'm focused on is just just delivering the best result I can, and the share price and the marke will take care of itself, hopefully.

Well, you attempted to sweeten up the twenty three to twenty four farm Gate milk price because you added three cents to it. It's finished at seven eighty three. Could have brought some of that and come forward a bit, I don't know. Paid the mate Bux smiles.

It was as simple as sort of moving money around like that. Maybe we could have, but no, it's a very structured sort of regulated model that the milk pross model that we run overseen by the Commerce Commission. So it's not a case of just just playing with it as we do. I mean, the number is very precise, and you know, to give another three cents on that at the end of the years as we did the cleanup. It's actually quite helpful. But now it's not a case of just moving things around as we see fit with the Commerce Commission behind us like a rock.

Does this result validation of your change in direction?

Well, I think so, and i'd like to think that maybe that's come a little bit more than that we had. We had some tough times as you know in eighteen nineteen we sort of reset the ship in a different direction and we've seen that the momentum continue. But certainly the last couple of years we've really started to see the team team fire and all cylinders and really starting to show what we can deliver. Of course, we've announced that we are going to have a look at our consumer business and what happens and that in due course what will announce later, But it shows that our ingredients in our food service business are rock stars in their own right, and we'll get them behind those invest continue to invest in them, and hopefully we'll see these sort of results continue into the future.

I was talking to a big player in the Kiwi fruit industry yesterday who made an interesting comment. He says, success follows Peter McBride, of course, your chairman, who was formerly with Sesbury.

Yeah, I mean, he said a great run that as Esbury has been off that board now for a while. But no, he's fantastic and the boards in good shape. Of of course, he's up for election in a month couple of months as well, of course, but he's been fantastic as a chair for the corporative and we're in good shape.

I don't think I'll have too many problems getting re elected off the back of this result. Okay, let's address the elephant in the room. It's not really an elephant, the six million dollar Man. Did you used to like that program with Lee Majors?

Well, I could that. I can't even remember the show you're talking about because I'm too young, but that would be lying. Look I do remember the show, and you know, I'll probably dig it out on YouTube at some point and show my son. But now look it's you know, I'm proud of the results that we've delivered today. And you know what falls out the back is just that the number as it falls based on what the metrics will deliver.

Well, it's not often I say to someone who earns six million dollars, I don't speak to that many people who earn six million dollars, to be honest, Miles, that they deserve it. But I think in your case, well I think you probably deserve it. There you go, there's a pat on the back from me. Thanks for your time today. Congratulations to Fonterra for a really good result, not only for Fonterra and the dairy industry, but for the New Zealand economy. Goodness knows we need it.

Thanks you much, Jomi, talking soon.

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