New Zealand's biggest exporter Fonterra says its financial position has significantly improved due to the recovering international dairy trade.
The dairy co-operative has reported a drop of nearly 4% in income in its half-year financial result, as the global slowdown reduced demand and the strong New Zealand dollar hurt returns.
Revenue fell by $300 million to $7.7 billion in the six months to December, compared with the same period a year ago.
But Fonterra says the lower prices it received for its products were largely off-set by the larger volumes it sold as world demand starts to pick up again.
It says it also made gains from currency hedging and it has been able to reduce debt.
Fonterra chairman Henry van der Heyden says demand and milk prices are showing signs of stabilising, and the outlook for the next two years is positive.
The co-operative is keeping its forecast milk payout to farmers at $5.70 per kilo of milk solids, with an expected dividend of 20 cents to 30 cents a share.
Fonterra will pay 8 cents a share to its farmer suppliers as an interim dividend.
Fonterra Shareholders Council chairman Blue Read is satisfied with the result, in particular its stronger balance sheet.
Mr Read says $263 million raised from farmer shareholders being allowed to buy extra shares contributed to Fonterra's improved financial state.