Profits Double
Fonterra reports FY26 profit more than doubles following the successful Mainland Group sale.
Anonymous
Fonterra reported NZ$2.6 billion in FY26 net profit, up from NZ$1.1 billion a year earlier, with earnings boosted by the sale of its Mainland Group. Underlying profit after tax increased to NZ$1.2 billion, or 71 cents per share, while underlying return on capital rose to 14.2%; the cooperative cited higher milk collections and improved margins. It set the final 2025/26 farmgate milk price at NZ$9.69 per kilogram of milksolids and declared total fully imputed dividends of 73 cents per share. Fonterra said it handled near-record milk volumes and record shipping volumes despite weather and geopolitical challenges, and forecast a 2026/27 farmgate price range of NZ$8.50 to NZ$10.50 per kilogram of milksolids. The Mainland divestment supports a strategic shift toward business-to-business operations, while the company expects continued investment and flagged potential weather-related risks to future milk supply.
Key Points
1
Fonterra's basic earnings per share were NZ$1.60, compared with NZ$0.81 from continuing operations, reflecting the contribution from the full-year result beyond its continuing businesses.
2
Fonterra forecast a 2026/27 organic milk price of NZ$14.30 per kgMS, within a range of NZ$13.30 to NZ$15.30, and expected organic milk sales volumes to grow 7.5%.
3
Revenue rose 4% to NZ$27.4 billion, while underlying operating profit excluding Mainland increased 24% to NZ$1.8 billion.
4
Fonterra expects capital investment of NZ$1.3 billion to NZ$1.6 billion annually over the next three years; increased investment partly offset free cash flow gains from divestment proceeds and higher earnings.
5
A Simply Wall St analysis flagged high debt, a dividend it considered not well covered by earnings, and relatively short management tenure as risks for investors weighing the result.
Sentiment
Mostly PositiveNEGATIVENEUTRALPOSITIVE
Publishers
24
Articles
59
Reach
83
A
AnonymousAuthor
