Fonterra Co-operative Group (FCG) H1 2026 earnings summary

Executive summary

• Revenue reached $13.9 billion for HY26, up year-over-year, with operating profit rising to $1,231 million and profit after tax increasing to $750 million, driven by improved pricing, product mix, and robust Foodservice and Ingredients performance.

• Interim dividend of 24 cents per share and special Mainland dividend of 16 cents per share declared, both fully imputed.

• Mainland Group divestment to Lactalis for $4.22 billion completed, enabling a $3.9 billion capital return and special dividend.

• Focus on growing value as a global B2B dairy provider, enhancing operational efficiency, and investing in technology and sustainability.

• Milk collections increased 2.5% year-over-year, with record volumes in the South Island.

Financial highlights

• Earnings per share rose to 45 cents, normalised EPS to 51 cents, and return on capital improved to 11.2%.

• Net debt reduced to $4.9 billion, with gearing ratio down to 34.6%–36.5%.

• Foodservice segment achieved 12.6% return on capital, and Ingredients delivered 11%.

• Gross margin slightly decreased to 17.2% from 17.7% year-over-year.

• Mainland business delivered strong results, aided by favorable commodity cycles and inventory revaluation.

Outlook and guidance

• FY26 Farmgate Milk Price forecast midpoint set at $9.70 per kgMS (range $9.40–$10.00), with full-year earnings forecast at 50–65 cents per share.

• Earnings guidance midpoint lifted, with performance tracking toward the top end of the range, subject to global risks.

• Milk collections forecast to reach 1,565m kgMS, up 4% year-over-year.

• Ongoing focus on cost reduction, operational efficiencies, and reaffirmed three-year earnings target.

• ERP program and major capital investments remain on track, with cost phasing adjusted between FY 2026 and FY 2027.