By Roshan Thomas (Reuters) -New Zealand’s Fonterra posted stronger annual operating profit across its businesses and declared a record full-year dividend on Thursday, sending its shares to their highest level in more than seven years. The Auckland-headquartered firm ended 1.7% higher at NZ$6.10, their strongest close since February 2018. Operating profit across Fonterra’s divisions rose, […]
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Fonterra shares hit early 2018 peak on record dividend, robust unit profits
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By Roshan Thomas
(Reuters) -New Zealand’s Fonterra posted stronger annual operating profit across its businesses and declared a record full-year dividend on Thursday, sending its shares to their highest level in more than seven years.
The Auckland-headquartered firm ended 1.7% higher at NZ$6.10, their strongest close since February 2018.
Operating profit across Fonterra’s divisions rose, with its ingredients arm up 17.4% on better margins from an improved product mix and food service up nearly 9% on strong volumes.
The consumer business posted a 16.1% gain in normalised profit from discontinued operations.
Fonterra has agreed to a deal to sell the consumer division to France’s Lactalis in 2026, pending shareholder approval.
The dairy co-operative declared a final dividend of 35 New Zealand cents per share, lifting its total payout for the year to a record 57 NZ cents, up from 55 NZ cents apiece last year.
It also raised its 2025–26 milk collection forecast to 1,525 million kgMS, compared with 1,490 million kgMS earlier, after reporting 1,509 million kgMS for the year ended July 31.
“Global dairy trade prices continue to be robust,” CEO Miles Hurrell said in an exchange filing.
“However, the risk of potential volatility in commodity prices and exchange rates from geopolitical dynamics remains.”
Full-year net profit fell 4.3% to NZ$1.08 billion ($627.8 million) on higher taxes after changing the treatment of farmer shareholder distributions.
Fonterra said it expects normalised earnings per share in fiscal year 2026 to fall to 45–65 cents, from 71 cents this year.
“In the medium-term, if product mix upgrades and capacity projects land on time, earnings can rebuild towards financial year 2025 levels in about three years,” said Jeremy Sullivan, investment advisor at Hamilton Hindin Greene.
($1 = 1.7203 New Zealand dollars)
(Reporting by Roshan Thomas and Jasmeen Ara Shaikh in Bengaluru; Editing by Krishna Chandra Eluri, Sam Holmes and Lincoln Feast)