Total group normalised earnings before interest and taxes (EBIT) reached $684 million and normalised profit after tax was $418 million.
While the net profit of $391m is down 22% on this time last year at a headline level, Fonterra says the 2020 financial year benefited significantly from the divestments of DFE Pharma and foodspring businesses overseas.
Fonterra chief executive Miles Hurrell is pleased with the result.
“Despite the major impact COVID-19 is having around the world, the co-op is staying focused on what it can control – looking after our people, making progress on our strategy to drive sustainable value for New Zealand milk and remaining committed to our 2021 priorities."
Those priorities are:
• our Co-operative, which is about being there for farmers and employees;
• performance, which is about hitting our financial targets; and
• community, which is about exceeding customer expectations, supporting communities through our nutrition programmes and making New Zealand’s low carbon farming model a powerful point of differentiation.
“I would like to thank our team for delivering this result. While we’ve been fortunate here in New Zealand, many of our people overseas are still in lockdown and have now been working from home for 12 months.
“Our farmer owners have shared words of support for our teams and this has provided a sense of purpose and encouragement when it’s been needed the most. It’s during these times you really can see what makes our co-op special.”
From a performance perspective, Hurrell says the co-op has had a great first six months of 2021 financial year.
“Our standout performer continues to be Greater China. The team has delivered a 38% increase in normalised EBIT to $339 million, reflecting the strength of our Foodservice business in this region, improvements in our Consumer business and China’s strong economic recovery following the initial impact of COVID-19.”
Hurrell says the board wanted to be in a position to continue paying dividends.
“It is encouraging to have got the co-op’s earnings and debt to a level that supports a 5 cent dividend at this point in the year.”
The record date for the payment of this dividend is 24 March 2021, and the payment date is 15 April 2021. Given Fonterra’s ongoing capital structure review, the co-op’s dividend reinvestment plan will not apply to this dividend, which will be paid in cash.
