Net profit after tax was NZ$418m (US$294m).
Chairman John Wilson said Fonterra has further reduced net debt, which is down NZ$793m (US$558m).
“Fonterra’s strong balance sheet means we are well placed to develop our markets and position our cooperative for the future,” Wilson said.
Milk collection in New Zealand was down 54m kgMS on the same period last season.
The Fonterra Board confirmed the forecast Farmgate Milk Price of NZ$6.00 (US$4.22) per kgMS continued to reflect global dairy markets with steady demand and relatively stable prices.
“Our cooperative has a forecast cash payout for this season of NZ$6.40 (US$4.51). This is made up of a forecast Farmgate Milk Price of $6.00 per kgMS and a target full year dividend of 40 cents per share. Our forecast cash payout reflects a 54% increase in the Farmgate Milk Price compared to last season and consistent earnings,” Wilson said.
Chief executive Theo Spierings said the first half result shows that Fonterra’s strategy of moving more volume into higher value products is working.
“Our Ingredients business maintained good margins,” Spierings said.
“We made the most of our manufacturing capacity, and the flexibility it provides to match production to demand and secure the best returns for our farmers’ milk.”
Spierings noted by the end of the first half, Fonterra moved an additional 227m LME of milk into higher value products in its consumer and foodservice business, contributing to a 30% increase in normalised EBIT.
He also pointed to increased earnings in China through the strong performance of the foodservice business, and growth in Chile through brand relaunches.
Wilson noted that while the fundamentals of dairy are strong, “there will be ongoing volatility in our global markets.”