Fonterra has reported total group profit after tax of $278 million for 1Q26, up $15 million on the same period last year, as the co-op now pushes ahead with its multi-year business reshaping and the divestment of Mainland Group.
CEO, Miles Hurrell, said the quarter reflected a solid performance against a backdrop of elevated global commodity prices.
“Our Total Group earnings for Q1 are in line with last year. We remain focused on delivering our strategy and driving long-term value,” he said.
Continuing operations delivered profit after tax of $158 million, down $10 million year-on-year, reflecting timing differences in sales phasing. Normalised earnings per share – excluding Consumer division divestment costs – were 18 cents, slightly above last year. The co-op reaffirmed its full-year earnings guidance of 45–65 cents per share for continuing operations.
Divestment Progress
The co-op received farmer shareholder approval in October for the $3.69 billion (NZ$4.22 billion) sale to Lactalis. Hurrell said regulatory approvals were progressing, with the New Zealand Overseas Investment Office having cleared the transaction. Completion remains targeted for the first half of the 2026 calendar year.
Hurrell said the sale is a significant milestone. “We’ve received a strong mandate from farmer shareholders on our strategy to grow value as a global B2B dairy provider.”
He reiterated its target to lift earnings back to FY25 levels by FY28, offsetting the earnings gap created by the Mainland divestment, with capital expenditure over the next three years was designed to grow value and improve operational efficiency.
Key projects underway:
- $75m expansion of butter production at Clandeboye, announced in September;
- rollout of a new Enterprise Resource Planning system, with the first site live and further sites scheduled for Q2;
- near-completed construction of the $75m Studholme protein hub, expected to deliver first products in early 2026; and
- ongoing construction of the $150m UHT cream plant at Edendale, due for completion in the second half of 2026;
