Fonterra Co-operative Group (FCG) H1 2025 earnings summary

Executive summary

• Profit after tax rose 8% to NZD 729 million (NZD 0.44/share), driven by higher operating profit and lower interest costs, partially offset by increased tax expense and ERP and Consumer divestment costs.

• Operating profit increased 16% to NZD 1,107 million, with strong performance in the Ingredients channel and improved product mix.

• Interim dividend declared at NZD 0.22/share, fully imputed, up from NZD 0.15 last year.

• Strategic focus on Ingredients and Foodservice, with Consumer business divestment process progressing via trade sale or IPO.

• Investments in manufacturing, supply chain, sustainability, and decarbonisation projects to future-proof operations.

Financial highlights

• Revenue for the six months ended 31 January 2025 was NZD 12.6 billion, up 14% year-over-year.

• Gross profit increased by NZD 192 million, mainly from improved margins and favorable product mix in the Ingredients channel.

• Net debt rose to NZD 5.5 billion, up NZD 1.3 billion year-over-year, reflecting accelerated advance rates and higher milk values.

• Return on capital at 10.2%, down from 13.4% year-over-year but above the 8–10% target range.

• Interim dividend of NZD 0.22/share, fully imputed, up 7 cents from the prior period.

Outlook and guidance

• FY25 Farmgate Milk Price forecast narrowed to NZD 9.70–10.30/kgMS, midpoint NZD 10.00, the highest on record.

• Full-year earnings forecast range raised to NZD 0.55–0.75/share, reflecting strong Ingredients performance and resilience in Foodservice and Consumer channels.

• Ongoing global geopolitical uncertainty and market volatility acknowledged, but well-positioned to manage risks.

• Capital investment for the full year expected to slightly exceed NZD 1 billion.