New Zealand's Fonterra Slumps To Record Loss

New Zealand dairy giant Fonterra unveiled the largest loss in its history Thursday as writedowns hit the bottom line during an "incredibly tough year".

Fonterra -- the world's largest dairy exporter -- announced a net loss of NZ$605 million ($380 million) for the 12 months to July 31, eclipsing the NZ$196 million reversal posted a year previously.

The plunge into the red was due to a previously flagged NZ$826 million in writedowns on underperforming assets which chief executive Miles Hurrell said would provide long-term benefits.

"Many of these calls were painful, but they were needed to reset our business and achieve success in the future," he said.

Hurrell said Fonterra, a collective that buys milk and dairy products from New Zealand farmers then sells them on to foreign firms, planned to concentrate on its core activities.

He said that would include focusing on high-quality New Zealand milk supplies, with Fonterra "rationalising our off-shore milk pools over time".

The loss follows a troubled few years which has seen a series of top executives depart as Fonterra slashed the value of investments in China and struggled to contain the fallout from a 2013 baby formula contamination scare.

Chairman John Monaghan said Fonterra, which will not pay an annual dividend, was simplifying its operations but remained ambitious.

"We will earn the right to make ambitious decisions by first doing the basics right and returning our balance sheet to a position of strength," he said.

"That will give us options to go for the opportunities that we create in the future."

Fonterra said its normalised sales revenue was down two percent at NZ$20.1 billion, while New Zealand milk collections were up one percent at 1.523 billion kilograms (3.4 billion pounds) of milk solids.