1News

Fonterra reports $674m half-year profit after tax, up 23%

March 21, 2024

Diary giant Fonterra has reported its result for the first half of FY24. (Source: 1News)

Dairy giant Fonterra has released its interim results for the first half of FY24, reporting a net profit increase of 23% to $674m after tax.

CEO Miles Hurrell said performance has been driven by higher margins and sales volumes across products and categories.

"I'm pleased to report we've continued the positive momentum seen in our earnings performance and delivered an interim dividend of 15 cents for our Co-op's farmer shareholders and unit holders, up from 10 cents this time last year."

The forecast Farmgate Milk price also lifted following volatility earlier in the season to a current midpoint of $7.80 per kilogram of milk solids (kgMS).

"While supply and demand dynamics remain finely balanced, with continuing global uncertainty, we are now well progressed through the season," said Hurrell.

"We have also maintained our forecast earnings guidance for the year of 50-65 cents per share."

Reported profit after tax of $674m is up $128m on this time last year, with EBIT (earnings before tax and interest) from continuing operations up 14% to $986m over the same period.

The co-op reported a return on capital over the last 12 months of 13.4%, up from 8.6% on this time last year, and earnings per share of 40 cents, up from 33 cents.

Hurrell said sales volumes from continuing operations are up 1.3% and gross margins are up from 16.6% to 18.4%.

"At the same time, our balance sheet position remains resilient, with our strong underlying performance and low debt position helping to further lower our financing costs this year."

Looking forward to the remainder of the year, Hurrell said while global inflationary pressures are easing, Fonterra is still monitoring the potential for volatility.

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