New Zealand farmer owned co op Fonterra reported a profit after tax of NZ$1.6bn (€899m) for the year ending July 2023, a NZ$994m (€558m) increase on the previous year.

This included a one-off amount of NZ$260m gain on the sale of a Chilean business offloaded by the company during the year.

Fonterra’s “core operations” delivered NZ$572m (€321m) compared with NZ$40m (€22m) the previous year due to “higher ingredient margins,” while “global markets” delivered NZ$385m (€216m) and “Greater China” contributed NZ$262m (€147m), both increases on the previous year.

The improving picture in China was attributed to the ending of COVID-19 restrictions. A final dividend of 40c per share was announced in addition to the interim dividend of 10c per share.

For 2024, Fonterra is forecasting a farmgate milk price in the range of NZ$6.00 – NZ$7.50 (€3.37-€4.21) per kgMS, reflecting a reduced demand for whole milk powders from key importing regions.

Demand for milk powders is expected to return from early 2024, and demand for other products including food service and value-added ingredients will continue to be robust according to Fonterra’s outlook statement.

Having withdrawn from China and Chile, Fonterra is now a New Zealand based dairy processor owned by its 9,000 farmer shareholders.

They processed 17.8bn litres of milk in 2023 across 45 sites and generated NZ$24.6bn (€13.8bn) of sales, employing almost 18,000 people in the 2023 financial year, which is down from 19,600 the previous year.

China is Fonterra’s largest market, generating NZ6.2bn (€3.4bn) of sales, with NZ$9bn (€5bn) generated in the rest of the Asia Pacific market. With NZ2.5bn (€1.4bn) of sales in New Zealand, it means that 90% of Fonterra’s sales are in export markets.