Fonterra reported a profit after tax of $1.1 billion for the financial year ending in July, marking a 4% decline, while its farmer shareholders received a record payout.
For the 2024/25 season, the full-year revenue reached $26 billion, a 15% increase, with farmer shareholders receiving a total of $16.2 billion.
The result showed the co-op slightly increasing its final payout to $10.16 per kilogram of milk solids. This is higher than last month’s estimate of $10.15/kg, which had a range set between $10.10/kg and $10.20/kg.
The co-op’s midpoint forecast of $10/kg for this season remains unchanged, within a range of $9/kg to $11/kg.
Fonterra’s final dividend for the 2024/25 season amounted to 57 cents per share.
The milk solids collected during the period slightly exceeded 1,500 million kilograms, representing a 2.6% increase.
Fonterra’s solid performance led to an operating profit rise to $1.7 billion, up from $1.5 billion the previous year.
Fonterra explained that the lower profit after tax of $1.1 billion compared to the previous year was due to a higher tax expense, resulting from the decision not to deduct distributions to farmer shareholders from taxable income and instead attach imputation credits to dividends.
“We continue to see good demand from global customers for our high-quality products made from New Zealand farmers’ milk, and this is driving returns through both the farmgate milk price and dividends,” chief executive Miles Hurrell said.
“Our vision is to be the source of the world’s most valued dairy.”
“Our strategy is designed to grow end-to-end value for farmers by focusing on being a B2B dairy nutrition provider, working closely with customers through our high-performing ingredients and foodservice channels.’’
“We’re also positioning the co-op to deliver further value through our foodservice and ingredients businesses, including continuing to invest in new manufacturing capability to meet growing customer demand for our high-value products.”
Fonterra has outlined plans to invest up to $1 billion in projects over the next three to four years.
These plans involve increasing the value of protein products, alongside the ongoing manufacturing project at the Studholme site to support the ingredients business, as well as enhancing milkfat value through new investments in butter and cream cheese.
Additional funds are expected to be invested in upgrading other sites with improvements in planning, data, AI, and automation systems.