Fonterra reports strong profit

New Zealand’s largest company, Fonterra, has announced a half yearly result of NZ $7.3 billion (€3.8bn). The result is up on last year and means Fonterra will have $4.5 billion (€2.3bn) available to pay farmers.

Record commodity prices, combined with improved returns from the sale of ingredients and branded dairy products saw Fonterra increase its half year revenues by $853 million to achieve the total revenues in the six months to November 30, 2007. An example of high commodity prices is the cost of butter, which for the year ended December was up 66%.

Fonterra chairman Henry van der Heyden says: “The selling prices achieved in the first half more than offset the higher average exchange rate of 75 cents. At the same time, we continue to see steady increases in the returns from our equity investments.”

The firm’s chief executive officer Andrew Ferrier adds that the co-operative’s overall performance in the first half of the season has left Fonterra well placed ahead of the anticipated slight softening of prices signalled in December 2007, which are may arise as a result of global production increases.