Dairy Co-Operative Fonterra has announced net profit after tax for 2016/17 was NZ$745m ($687m), a drop of 11 per cent.
Despite the drop, the company also announced an increase in the amount it pays farmers. It confirmed a final Cash Payout of NZ$6.52 for the 2016/2017 season for a 100 pet cent share-backed farmer. This is made up of a Farmgate Milk Price of NZ$6.12 per kgMS and a dividend of 40 cents per share.
Revenue increased by 12 per cent to NZ$19.2 billion, with rising prices offsetting a 3 per cent decline in volumes at 22.9 billion LME. Normalised EBIT of NZ$1.2 billion was down 15 per cent as a result of reduced margins across the business which also influenced net profit after tax, down 11 Per cent at NZ$745 million.
Chairman John Wilson said the Co-operative’s ability to maintain its forecast dividend despite the Milk Price increasing by 57 per cent over the year and the impact of negative stream returns was an excellent result.
“We will always need to manage variability across our Co-operative – both in global markets and in our local farming conditions. We’ve demonstrated our ability to deal with those conditions and deliver on our strategy again this year,” said Wilson.