29 Mar 2012

Fonterra lifts half-year profit

3:15 pm on 29 March 2012

Fonterra has lifted its half-year profit by 18% as it sold more dairy products.

The world's biggest dairy exporter and New Zealand's largest company made $346 million in the six months to the end of January, most of which is due to a 44% increase in the bottom line of its ingredients business. In the six months to January 2011 it made $293 million.

Sales rose by more than 7% and good farming conditions in spring and early summer helped Fonterra collect a record 1 billion kilograms of milk solids for the season so far - 10% more than this time a year ago.

Fonterra chairman Sir Henry van der Heyden says the co-operative has performed well, given the turmoil in global markets.

He says while international dairy prices have softened slightly since the highs they reached in 2011, they remain relatively strong.

The farmer-owned co-operative left its forecast payout at between $6.75 and $6.85 a kilogram of milk solids, which reflected declining commodity prices and a stronger New Zealand dollar. Last year, it paid a record $8.25 per kilo.

Fonterra also released a revised version of its growth strategy and plans to focus on expanding in emerging markets, particularly in China, Asia and Latin America, where demand is outstripping supply among growing middle classes. It also is eyeing the Middle East and Africa.