2011-12 final payout down

The final payout includes a lower farmgate milk price of $6.08/kgMS with a dividend of 32c/share. The co-op has retained 10c/share.

Announcing the result, Chairman Henry van der Heyden says the 2012 year had been one out of the box for dairy:

"All around the world, we saw record dairy production which was mirrored back here in New Zealand.

"Global dairy demand held up reasonably well but this ocean of milk obviously impacted on global commodity prices, with the GlobalDairyTrade (GDT) index reaching its lowest value in 34 months in May.

"This contributed to a lower Farmgate Milk Price in the 2012 year, however, the impact of this decline on overall earnings for farmers has been eased a little by the much higher volumes of milk they produced."

Fonterra Chief Executive Theo Spierings says the co-op has posted a strong operating performance, with normalised earnings1 of NZ$1.03 billion for the 2012 year, up 2% on the prior year.

Profit before tax was up 9% on the prior year and net profit after tax was $624 million, down 19%, largely due to tax credits of $202 million in the prior year not repeated in the current year. Excluding those credits, Fonterra's net profit after tax improved by 10%.

Results highlights compared to the prior year include: -

• Record New Zealand milk flows, up 11% to 1,493m kgMS in the current season

• 11% increase in export volumes to 2.32 million metric tonnes (MT)

• Sales volumes increased 2 per cent to 3.94 million MT

• Flat revenues of $19.8 billion

• Higher operating cash flows of $1.4 billion, up $206 million

• Balance sheet strengthened with economic gearing ratio improving from 41.8% to 39.1%

Spierings says the result show Fonterra's success in growing both volumes and value.

"The hard work of our farmers in producing record milk flows was matched by the efforts of the business in processing, selling and shipping these higher volumes, while also managing inventory levels," says Spierings.