Fonterra First-Half Profit Increases on Record Dairy Shipments

Fonterra Cooperative Group Ltd. (FCG), the world’s largest dairy exporter, reported first-half profit rose 18 percent as surging demand from Asia boosted shipments to a record.

Net income rose to NZ$346 million ($283 million) in the six months ended, Jan. 31, from NZ$293 million a year earlier, the Auckland-based company said in a statement today. Sales gained 7.2 percent to NZ$10.03 billion.

Fonterra, which accounts for about 40 percent of the global trade in dairy products, in January said it exported a record 246,000 metric tons of dairy products in December, amid increasing demand for protein in Asia. China’s purchases of milk powder surged 45 percent in February, according to NZX Agrifax.

Prices “remained relatively stable throughout the first half,” Chairman Henry van der Heyden said in the statement. “These prices were supported by strong demand for quality dairy ingredients in emerging markets across a number of Asian economies, as well as Brazil and China.”

Last month, the company said milk delivered to its New Zealand plants rose 9.8 percent in the eight months ended Jan. 31 from a year earlier amid favorable farming conditions.

The company maintained its March 12 forecast milk payment to farmer shareholders of NZ$6.35 per kilogram of milk solids. It also maintained its forecast of a full-year dividend of 40 cents to 50 cents, based on earnings of NZ$570 million to NZ$720 million in the year ending July 31.

To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Chris Bourke at cbourke4@bloomberg.net

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