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Fonterra cuts FY earnings forecast after Danone arbitration decision
December 1, 2017 / 1:29 AM / 17 days ago

Fonterra cuts FY earnings forecast after Danone arbitration decision

Dec 1 (Reuters) - New Zealand dairy Fonterra Co-operative Group cut on Friday its forecast earnings for the financial year after a tribunal determined it must pay Danone SA NZ$183 million ($125.10 million) for recall costs incurred by the French company.

Fonterra said forecast earnings per share for the 2017/18 financial year would now be 35 to 45 NZ cents, instead of the 45 to 55 NZ cents previously forecast. It also said the decision would not have an impact on its forecast farmgate milk prices.

A unit of Danone recalled some types of infant formulas sold under the Karicare brand in 2013, after its milk powder supplier Fonterra said there was a risk of bacteria in its products that could cause fatal botulism. ($1 = 1.4628 New Zealand dollars) (Reporting by Aaron Saldanha in Bengaluru; Editing by Muralikumar Anantharaman)

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