Leading dairy co-operative Fonterra has increased profit in 2016 in spite of a challenging year marked by low milk prices. The co-op’s half year results for the current financial year show a profit before interest and tax of AUD $665m, an increase of 77% from the same period last year and a net profit after tax of AUD $409m, up 123%.
Due to low milk prices Fonterra has placed a stronger emphasis on dairy products. It has increased sales of its New Zealand ingredients businesses and within the Asia and greater China consumers. The positive results will enable the co-op to pay higher dividends to its farmers.
Fonterra’s chair, John Wilson, explained: “The low prices have placed a great deal of pressure on incomes, farm budgets, and our farming families. Our priority is to generate more value out of every drop of our farmers’ milk by focusing on the areas within our control. We aim to efficiently convert as much milk as possible into the highest-returning products.”