Chinese infant formula company Beingmate Baby & Child, in which Fonterra has an 18.8 per cent interest, said its expected its loss for 2016 would now come to RMB750 million to RMB800 million ($150.8m to $160.9m) - about double its previous forecast.
The company last year forecast a loss of RMB380m to RMB410 million ($76.4 to $82.4m). The revised loss compares with a profit of RMB103.6 million ($20.7 million) in 2015.
In a translated statement, Beingmate said its fourth quarter revenue and profitability showed a slight improvement but that annual losses had become "more significant than previously expected".
Beingmate said that after discussions with its accounting firm, it had decided to reverse its cumulative deferred income tax assets of RMB300 million.
In addition, it had make a provision for bad debt of its subsidiaries that had suffered excess losses, to a total of RMB61 million.