Fonterra Posts 11 Percent Profit Growth, Hits Record Milk Price

(MENAFN) New Zealand’s dairy powerhouse, Fonterra Co-operative Group, revealed impressive financial results alongside a stable outlook for the 2024/25 fiscal year, highlighted by an all-time high Farmgate Milk Price and steady earnings growth.

The company posted a net profit after tax of NZD 1.16 billion (USD 692.4 million), marking an 11% increase compared to the previous year. This growth was fueled by stronger performances across its ingredients, foodservice, and consumer divisions, according to Fonterra’s Q3 business update published on Thursday.

Earnings per share climbed 13% to 70 cents, while the return on capital reached 11%, aligning with the Co-op’s long-term target range of 10-12%, the statement noted.

Fonterra also tightened its full-year earnings per share forecast for fiscal 2025 to a range of 65-75 cents, citing the robust results from the third quarter.

"We are heading into year-end with a strong balance sheet and full year debt metrics on track to be below the Co-op's target range," said Fonterra CEO Miles Hurrell.

The cooperative maintained its midpoint forecast for the 2024/25 Farmgate Milk Price at NZD 10 (USD 6) per kilogram of milk solids, consistent with prior guidance, within a range of NZD 9.7 to 10.3 (USD 5.8 to 6.2). It also introduced an initial forecast for the 2025/26 season at NZD 10 (USD 6) per kilogram of milk solids, with a broader indicative range of NZD 8 to 11 (USD 4.8 to 6.6), reflecting ongoing global uncertainties.

This pricing is expected to inject approximately NZD 15 billion (USD 9 billion) into New Zealand’s economy, predominantly benefiting rural communities, Fonterra reported.

Hurrell emphasized the Co-op’s confidence in leveraging high-margin sales channels alongside New Zealand’s milk quality advantage as the optimal strategy for generating long-term value for farmers and the country. (1 NZ dollar equals 0.60 U.S. dollar)

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