Fonterra Co-operative has announced a net profit after tax (NPAT) of $506 million for the financial year ended 31 July 2015.
The company's NPAT rose 183 per cent on the previous year despite difficult market conditions, which the company attributed to a stronger second half performance.
It's annual revenue of $18.8 billion was down 15 per cent on last year.
Fonterra CEO Theo Spierings said improved second half results in the 2015 financial year were driven by a strong focus on cash and costs.
“We focused on improving our sales mix, achieving more efficiencies, maximising our gross margins and achieving our strategic goals faster. Our efforts contributed to a second half rebound in our performance and profitability.”
The consumer and foodservice segments also delivered a strong result, mainly due to a record performance from Asia and China, according to Fonterra.
Spierings said this year’s difficult market conditions were shaped by a rare combination of factors.
"Prices are often cyclical, but this year’s market is one of the most difficult I’ve known. The global dairy industry has been hit simultaneously by geopolitical turmoil in the Middle East and Russia, Ebola in Africa, an economic slowdown in China and the sharp drop in oil and mineral prices. These events suppressed demand at a time when farmers all around the world had ramped up production in response to previous high prices. This resulted in an inevitable impact on pricing.
“Looking ahead, this uncertainty means that world markets are likely to be difficult in the medium-term. However, we will be more than ready when the market turns.
“That’s because we have thoroughly reviewed our execution of strategy, our processes and working practices to embed long-term change. We are focusing all our resources to make us faster, more efficient, and achieve sustainable results,” Spierings said.
