Fonterra Co-operative reported earnings which showed a strong financial performance in the first half of its 2024 fiscal year. Profit after tax increased by 23% to NZ$674m (€375m) and the co-op announced an interim dividend of 15c per share, up from 10c last year.

Fonterra narrowed its forecast for farmgate milk prices giving a current midpoint of €7.80 per kg milk solids. The co-op said the narrowing of the range followed a volatile start to the New Zealand milking season. It forecast milk collections at 1,465 kgMS, a drop of 1% on the previous year.

Fonterra said that higher margins and sales volumes in its food service and consumer channels helped offset lower returns in the ingredients channel.

Looking at the international picture, the co-op cited lower input costs in Southeast Asia and a strong performance by food service in China, both of which helped drive profit. The higher price of milk in Australia, on the other hand, proved a drag during the period.

'Continued momentum'

Speaking at the announcement of the interim results CEO Mike Hurrell said that he is pleased with the “continued momentum” in earnings and dividend delivery. The co-op did not raise its full-year earnings guidance, holding that at 50-65 cents per share.

On strategy, he said that the new capital structure at Fonterra is attracting farmers back to the co-op and that they now have a “strong pipeline of farmers wanting to join”.

Hurrell also spoke about commercialising the efforts farmers have made on sustainability.

He said that “this includes introducing to customers our regenerative agriculture position, which recognises our farmers’ pastural farming system”.

Looking ahead, Hurrell said Fonterra is well prepared for any disruption in global supply chains or changes in demand from key importing regions.