WELLINGTON (AFP) – New Zealand dairy giant Fonterra announced more than NZD820 million in write-downs yesterday, a financial hit that will plunge it deep into the red and prevent an annual dividend payout.

Fonterra – the world’s largest dairy exporter – said a review of operations had found assets were collectively over-valued by NZD820-860 million.

It said the one-off costs meant the cooperative would post a rare loss of NZD590-675 million when it unveils its annual results next month.

Chairman John Monaghan said Fonterra would not pay an annual dividend to shareholders as it was “in the best long-term interests of the co-op” to reduce debt.

The upcoming loss will be only the second in the 18-year history of Fonterra, a collective that buys milk and dairy products from New Zealand farmers then sells them on to foreign firms.