Fonterra says it has emerged from the past year with a stronger balance sheet, despite the highly volatile world dairy market and the slump in commodity prices.
Revenue fell from $19.5 billion to $16 billion in the year to the end of July, due to weaker dairy prices, however the dairy co-operative significantly reduced its debt level.
Fonterra's profit rose 47% to $433 million.
The multinational has confirmed its farmers will get a payout of $5.20 a kilogram of milk solids for last season.
While the milk price was more than a third lower than the previous year's record, Fonterra posted a strong rise in the profit distributed to farmers from its added-value ingredient and consumer businesses.
Milk production rose 7% to 1.28 million kilograms of milk solids,setting a new record as many dairy farms recovered from drought. The co-op expects this year's production to be at a similar level.
Chief executive Andrew Ferrier says the company has been developing new technology, which, for example, allows it to produce mozarella cheese in eight hours rather than waiting for the three-month maturing process.
On Tuesday, the dairy multinational increased the forecast payout for the current season by 55 cents to $5.10 per kilo of milk solids.