Fonterra lifts FY net profit

Group emerges from 'testing' year with profit lift, but decline in revenue.

Fonterra Co-operative Group (FSF) is eyeing a bump to earnings in the year ahead, after emerging from a "testing" year with a lift in net profit.

In the year to July 31, Fonterra's net profit was $NZ718 million, a 17.9% lift on the $NZ609 million in the previous year.

In the same period, revenue from sales came in at $NZ18.643 million, a 5.7% decline on the $NZ19.769 million in 2012.

The group will pay a final dividend of 16 NZ cents, payable on October 18 to those on the share register as at October 10.

Combined with the group's interim dividend, also of 16 NZ cents, Fonterra's total dividend for the year was 32 NZ cents.

Fonterra chairman John Wilson said 2013 was a year that tested the group's resilience, through events such as a severe drought and a precautionary product recall.

"After a superb first six months for both production and performance, our farmer shareholders endured a drought which in some regions was the worst in nearly 70 years," he said.

Earlier this week, Fonterra announced a lift to its forecast Farmgate Milk Price for the 2014 season, which it expects will likely impact on earnings for the current financial year.

“The business achieved strong EBIT growth in Asia, Africa, the Middle East and in our Soprole business in Chile," Fonterra chief executive Theo Spierings said.

"However, this was offset by a weaker second half from NZ Milk Products and a 37% decline in normalised EBIT in Australia and New Zealand (ANZ) as we make changes to our Australian business."