Fonterra has reported a rise in net profit after tax (NPAT) of 123 per cent for the first half to January 31 despite a tough global market, but says its Australian results remain unsatisfactory.
The dairy cooperative reported a NPAT of $NZ409 million (537m), and normalised earnings before interest and tax of $NZ665m, up 77 per cent.
Fonterra chief executive Theo Spierings said the strong performance reflected a sustained effort in three main areas.
“We focused on the efficiency of our ingredients business and capturing demand for ingredients in a wide range of markets.
“We aimed to make the most of global consumption growth by building demand for higher-value products in our consumer and foodservice markets.
“Our working capital has improved significantly, and our inventory levels are lower than in recent periods for this time of year - down 9 per cent in volume terms due to strong sales.
“Finally, we maintained strict financial discipline to keep lifting our return on capital and our strong cash flow has enabled us to strengthen the Co-operative and reduce gearing,” Spierings said.
Fonterra said that while it made progress in the “highly competitive market of Australia”, the financial results were still “not satisfactory” as it sought to recover from a facility fire in Stanhope, Victoria, and a shift in product mix at its plant in Darnum, Victoria, from nutritionals to powders following its precautionary recall.
“However we have implemented a clear plan to return to profitability,” the company said.
