Wellington - New Zealand's Fonterra Co-operative Group Limited, the world's biggest exporter of dairy products, said Wednesday it had overcome a difficult year to post a strong rise in profit for its farmer-shareholders. Chairman Sir Henry van der Heyden said the business challenges and market volatility Fonterra faced in the year ending July 31 were probably unique in the lifetimes of anyone involved in dairying today.
"Commodity prices dropped from record highs, the exchange rate experienced roller coaster-like movements, much of the world plunged into a deep recession and the global financial meltdown rewrote the rules about how companies obtained finance," he said.
"On top of this, the market turmoil occurred as many farmers were emerging from the worst drought in more than a century during the previous 2007/08 season."
The company reported profit available for distribution to farmers of 603 million New Zealand dollars (434 million US dollars) up from 364 million New Zealand dollars for the previous fiscal year, which was 14 months because it changed balance date.
Fonterra confirmed it would pay its 10,426 shareholders 5.20 New Zealand dollars for every kilogram of milk solids they supplied during the year.
That was well down on the previous year's record 7.59 New Zealand dollars a kilogram, reflecting the collapse of global dairy commodity prices during the season.
Fonterra issued on Tuesday an advance forecast of 5.10 New Zealand dollars for the current season ending May 31.
The company collected a record total of 1,281 million kilograms of milk solids last season, 7 per cent up on the previous drought-stricken year.
Van der Heyden said this season's production was expected to be similar to last year.
