New Zealand dairy giant Fonterra has announced a 65 per cent increase in net profit after tax to $807 million (NZ$834 million) for the financial year ended 31 July 2016.
The result came despite difficult market conditions, in particular the global oversupply of milk and a drop in demand (mainly from China and Russia).
The Co-operative is paying a Cash Payout of $4.30 for the 2016 season for a 100 per cent share-backed farmer, comprising a Farmgate Milk Price of $3.90 per kgMS and a dividend of 40 cents per share, on a total available for payout of $4.41.
Chairman John Wilson said in a statement that the 2015/16 season had been incredibly difficult for farmers, their families and rural communities, with global dairy prices at unsustainable levels.
“Our Co-operative has responded. We continued with the significant and necessary changes we began in the business over three years ago to support our strategy and its priorities, and worked hard to return every possible cent of value back to our farmers.
“Our business strategy is serving us well. We are moving more milk into higher-returning consumer and foodservice products while securing sustainable ingredients margins over the GlobalDairyTrade benchmarks, especially through speciality ingredients and service offerings.”