The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Joshua Dale - Craigs Investment Partners Limited - Analyst
: Two questions for me, just an easy one to start. How much did stream returns contribute to the $0.44 of EPS?
Question: Joshua Dale - Craigs Investment Partners Limited - Analyst
: Okay. Brilliant. And the second question is, given ingredients operating profit is up 49%. That's very strong given the stream returns didn't appear
to be a huge help this half. Can you dig into the drivers of the strong Ingredients result a bit more and whether you see those continuing or not
going forward?
Question: Nick Mar - Macquarie Group Limited - Analyst
: Just on the advance rates, obviously, those are elevated at present despite sort of a pretty strong milk price. Can you just talk about whether you
think the current payout for the advanced rate is a new normal? Or is that proportion going to come back down over time as you sort of (inaudible)
milk.
Question: Nick Mar - Macquarie Group Limited - Analyst
: Okay, great. And then just on the ingredients business, could you just talk through why the second quarter was such a strong performance, obviously,
the gross margin ticked back a little bit. So it suggests a strong volume number. Was there anything kind of one-off in that quarter that you can
talk to?
Question: Nick Mar - Macquarie Group Limited - Analyst
: That's great. And then just in terms of the earnings range that you've still got, could you just talk about the biggest factors that sort of flex between
those points, noting the sort of if you repeat in the second half of last year, you'd be towards the top end of the current guidance range.
Question: Matt Montgomerie - Forsyth Barr Limited - Analyst
: Well done on a solid set of numbers. Just if we look at your earnings guidance of $0.65 at the midpoint versus $0.50 you set back in September. Is
it fair to assume that all of this increase in the guidance range has come from Ingredients? Or have you been pleasantly surprised or otherwise
either on the upside or downside in Foodservice and Consumer.
Question: Matt Montgomerie - Forsyth Barr Limited - Analyst
: Perfect. And then just on sort of the strategy post-Consumer sale. It would be useful if you could just talk through the rationale and reasoning for
the shift in volumes towards ingredients rather than food service, I guess, despite the growth of Foodservice over the past 5, 10 years, sort of read
if your Foodservice volume growth is going to be relatively negligible and all the volumes will be being allocated back to Ingredients?
Question: Matt Montgomerie - Forsyth Barr Limited - Analyst
: Yes. No, that's clear. And then just on the consumer business, your margins were relatively our resilient, I'd say, particularly in the second quarter.
It would be useful if you can just expand on how you've been able to, I guess, keep margins in consumer relatively resilient despite the milk price
impact through the half?
Question: Andy Thompson - Sport Nation, The Rural Roundup - Analyst
: Just a question for Miles, please. There's recently been a call from certain political parties, politicians, also parts of the ag sector for New Zealand
to follow the US and pull out of the Paris Climate Accord. Do you have any thoughts on this?
Question: Andy Thompson - Sport Nation, The Rural Roundup - Analyst
: Just a follow-up. Are you concerned that parts of the ag sector, some of your shareholders are calling for this. And if so do you have any thoughts
or any position you're going to go to them to particularly explain the importance of the Paris Climate Accord on our trade agreements?
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