Fonterra lifts Q1 profit on firm dairy prices
NZ dairy giant posts NZ$278m result as outlook begins to soften
4 December 2025
1 minute read
By: New Zealand's Fonterra Co-operative Group reported a 5.7% rise in first-quarter profit on Thursday, buoyed by firmer global commodity prices, reported Reuters.
The dairy giant reported a profit after tax of NZ$278 million ($161 million) for the quarter ended October 31, higher than NZ$263 million in the same period last year.
Fonterra attributed the growth to higher global commodity prices and reiterated its focus on implementing its strategy to strengthen its key ingredients business and improve operational efficiency.
Global dairy prices rose early in the season on tighter exportable supply and foodservice demand, but the outlook is softening as Northern Hemisphere output improves, said Jeremy Sullivan of advisory firm Hamilton Hindin Greene.
The company also reported progress on its NZ$4.22 billion sale of Mainland Group to France's Lactalis, with regulatory approvals secured from New Zealand's Overseas Investment Office, though additional clearances remain pending.
Fonterra expects the transaction to be completed in the first half of 2026.
The co-operative now plans to seek final court sign-off for a proposed NZ$2 per share capital return after a shareholder vote scheduled for February 2026.
Fonterra last week narrowed its annual forecast for farmgate milk price — the price it pays to farmers for milk — to a range of NZ$9 to NZ$10 per kilogram of milk solids.
The company reaffirmed its fiscal 2026 normalised earnings per share outlook of 45–65 NZ cents per share.
"Fonterra is signaling a clear focus on being a higher-value, ingredients-led B2B dairy provider," Sullivan said. He added that investing up to NZ$1 billion in capacity and product mix improvements, among others, will underpin performance once the divestment and capital return are complete.
