Fonterra Co-operative Group (ASX:FSF) has responded to credit rating agency Fitch's revised rating outlook for the Co-operative from ‘Stable’ to ‘Negative’.
Fitch said in its announcement that the downgrade follows Fonterra’s reduction of its forecast earnings for 2019 financial year, but has affirmed Fonterra’s long-term credit rating at ‘A’.
Fonterra’s Chief Financial Officer Marc Rivers says Fonterra acknowledges that the Coop’s earnings performance is not satisfactory and that it needs a fundamental change in direction if it is to increase its earnings capacity and quality.
The company is taking a series of steps to deliver a better return on the capital including reducing its debt by $800 million by the end of the 2018/19 financial year.
Shares in Fonterra Co-operative Group (ASX:FSF) Shares closed 1.24 per cent higher to $4.08 yesterday.