Fonterra Reports Significant Profit and Updates Forecasted Milk Price

Fonterra, the New Zealand co-op, has reported a profit after tax of NZ$1.158 billion for the third quarter, marking an 11% increase from the previous year. This surge of NZ$119 million in profits has led the company to revise its year-end earnings range to 65-75 cents per share, aligning with the higher end of its previously guided range.

The company has also disclosed an opening forecast for the farmgate milk price for the 2025/26 season at $10.00 per kg of milk solids (MS), influenced by stable near-term market demand. Miles Hurrell, Fonterra’s Chief Executive, emphasized their focus on delivering robust shareholder returns through earnings and farmgate milk price, having provided a 22-cent interim dividend for the financial year 2025.

Despite geopolitical uncertainties, Fonterra remains optimistic, maintaining its forecast for the current season's milk price at $9.70-$10.30 per kg/MS, which significantly contributes around $15 billion to the New Zealand economy. Hurrell acknowledged that a substantial portion of this revenue supports regional communities throughout the nation.

In terms of financial performance, Fonterra’s third-quarter normalised profit hit $1.158 billion, reflecting a thriving Ingredients channel and growth in foodservice and consumer channels. The company’s strategy, which has included the potential divestment of its global consumer businesses, aims to focus on high-performing sectors to ensure sustainable returns. As Fonterra prepares to present this divestment option to farmer shareholders, it remains committed to maintaining its global reach and diverse product mix.