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Big jump in Fonterra's annual profit

NZ Newswire logoNZ Newswire 21/09/2016

Dairy giant Fonterra has posted a 65 per cent jump in annual net profit to $834 million despite a challenging global market.

Chairman John Wilson says the last season had been incredibly difficult for farmers, their families and rural communities, with global dairy prices at unsustainable levels.

But he said Fonterra's business strategy was serving it well.

"We are moving more milk into higher-returning consumer and foodservice products."

Last year its net profit was $506m.

The co-operative on Wednesday lifted its forecast payout for farmers for this season to $5.25 per kilogram of milk solids - its second hike with a month.

Mr Wilson said milk prices remained low but there were indications things were on the rise.

"As the signs in the market improve, we are very strongly positioned to build on a good result in the year to come."

Chief executive Theo Spierings says the strategy of selling more volumes of milk solid at a higher value is paying off.

"For our farmers, the promise is that we will make the most of their milk. We're keeping that promise."

It had an annual revenue of $17.2 billion which was down 9 per cent on last year, while debt was reduced by $1.6b to $5.5b.

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