Fonterra has reported a net profit of $1.17 billion for the fiscal year ending in July, a decline from the previous year’s $1.6 billion. Despite this drop, the dairy cooperative has increased its milk payout to farmers and announced a strategic review of its operations, focusing on core strengths and sustainable growth.


Fonterra, a leading dairy co-operative in New Zealand known for its extensive portfolio of dairy products and global presence, has reported a net profit of $1.17 billion for the 12 months ending in July. This figure marks a decrease from last year’s record high of $1.6 billion. Despite the decline in earnings, the company has increased its payout to farmers and demonstrated robust financial performance.

Key Financial Figures:

  • Net Profit: $1.17 billion (down from $1.6 billion from continuing operations)
  • Revenue: $23.0 billion (compared to $26.1 billion)
  • Earnings per Share: 67 cents (down from 95 cents)
  • Net Debt: $2.6 billion (reduced from $3.2 billion)
  • Milk Payout: $7.83 per kgMS (down from $8.22 per kgMS)
  • Forecast Payout for 2024/25: Midpoint of $9 per kgMS
  • Final Dividend: 55 cents per share (up from 50 cents)

CEO Miles Hurrell attributed the decrease in profit to reduced tailwinds from business divestments and high prices experienced in the previous year. However, he emphasized Fonterra’s ability to maintain positive momentum, stating, “We’ve maintained positive momentum and delivered earnings at the top end of our forecast range.”

Increased Milk Payout

Fonterra has raised its forecast for farmgate milk prices for the 2024/25 season to a midpoint of $9 per kilogram of milk solids (kgMS), within a range of $8.25 to $9.75 per kgMS. The payout for the recently concluded season stood at $7.83 per kgMS, with total cash payouts, including dividends, reaching $8.38.

Strategic Review and Future Outlook

Currently, Fonterra is undertaking a strategic review of its operations, which may involve the divestment of its consumer brands, including popular products like Anchor and Mainland, as well as operations in Sri Lanka and Australia. Despite the review, Hurrell noted that these businesses are performing well, with a focus on maximizing value for farmer shareholders.

Additionally, Fonterra has announced a $375 million investment in its facilities this year. However, the company is also closing parts of some factories in Waikato and outsourcing certain jobs to India. A revised business strategy with a “sharper focus” on core strengths is set to be unveiled next week, indicating Fonterra’s commitment to adapting to market conditions while ensuring sustainable growth.

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