FONTERRA

As we predicted - Fonterra has done a lovely job of dressing up their half yearly result and it is interesting how the main stream media has portrayed it.

The NZ Herald has reported an increase in revenue - here's the headline - no mention that the two reporting periods are different not any mention of the increase in debt ratios.

Stuff has it that revenue has risen - again no mention of the change in reporting periods which actually show that instead of a rise there has been a real time decline..

The real story is in the third paragraph

Adjusting for timing factors and including exchange hedging, Fonterra said total revenue would have been down by 7.6 percent reflecting the lower international dairy prices. Significantly Fonterra’s already high debt gearing has increased from 57.4 per cent to 61.5 per cent over the last six months.

And then the NBR has that Fonterra has revenue of $8billion in six months but debt is up then it doesn't shilly shally around and does a good precis of the issues.

While Fonterra has weathered the last six months better than many predicted we don't think that farmers will be overjoyed with todays announcement.