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Forsyth Barr upgrades Fonterra earnings forecast after strong result. Business Reporter · NZ Herald · 24 Sep, 2026 08:56 PM 3 mins to read NOW PLAYING - 'We believe in strong co-ops': How Fonterra beat its earnings targets | Ryan Bridge TODAY Fonterra CEO Richard Allen joins Herald NOW following the dairy giant posting a $3.4 billion operating profit for FY26. Video / Ryan Bridge TODAY Forsyth Barr has upgraded its earnings forecast for Fonterra after this week's stronger-than-expected result from the co-operative dairy giant. The broker noted Fonterra's underlying operating profit reached $1.8 billion in the 2026 year, meaning the co-op had achieved its target of returning earnings to pre-divestment levels Unlock all articles by subscribing to this international offer All-Access weekly. Herald Premium, Viva Premium & The Listener

Fonterra profit surges, $1b South Island investment announced. Reading Time: 4 mins read Fonterra has reported a $2.6 billion after-tax profit for FY26 and announced an additional $1b investment in its South Island manufacturing network over the next three years. The co-operative generated $27b in revenue and $19.6b in cash returns to farmer owners and unit holders during the year to July 31. Reported operating profit rose 97.6% to $3.4b, including a $1.2b benefit from the sale of Mainland Group, while profit after tax increased 142%. Excluding the divested consumer businesses, underlying operating profit increased 23.6% to $1.8b and underlying profit after tax reached $1.2b. Underlying earnings rose 17 cents to 71 cents per share, while return on capital increased from 11.7% to 14.2%. Fonterra chair Peter McBride says the result came in at the upper end of the co-operative's expectations. "Consistency is important to farmers and our shareholders. We're proud of the collective effort that's delivered another strong result, at the top end of our earnings guidance," McBride says. "The team hasn't missed a beat despite the Mainland divestment process and the significant change that followed." Record shipping volumes Fonterra chief executive Richard Allen says the co-operative collected, processed and shipped near-record milk volumes during FY26. "Despite some challenging conditions, including weather events and geopolitical volatility, we leveraged our full supply chain network and logistics partnerships to keep milk moving, achieving record shipping volumes and materially improving our delivery performance," Allen says. Fonterra's Ingredients business delivered $1.29b in operating profit, supported by global demand for protein, favourable pricing and product allocation decisions. Foodservice operating profit reached $547m, driven by volume and pricing growth across its product categories and markets. The result means Fonterra has already reached its target of returning earnings to FY25 levels within three years of divesting its consumer businesses. "One year ago, we set a target for earnings to return to FY25 levels within three years if the Consumer and associated businesses were divested," Allen says. "I'm pleased to share that our team's focused execution of strategy in FY26 has got us to that target already." South Island investment Fonterra will use capital retained from the Mainland Group sale and operating cash flow to accelerate and expand its South Island protein manufacturing network. The additional $1b programme will also fund projects intended to improve water use, energy resilience and emissions performance. "These projects position the Co-op to respond to changes in how people want to consume dairy, with a growing focus on sustainably produced, protein-rich and nutrient-dense foods," Allen says. The investment is intended to shift more milk away from whole milk powder and other commodities towards higher-value products. It will increase processing capacity, strengthen existing customer relationships and support new opportunities as demand for advanced dairy proteins grows. Once operational in 2029, the projects are expected to create between 50 and 60 permanent positions while supporting local companies involved in construction. Fonterra invested $1b in sustainability and growth projects during FY26 and expects annual capital expenditure of between $1.3b and $1.6b over the next three years. Its replacement enterprise resource planning system remains on schedule and within budget, with five sites operating on the platform and two more expected to go live later this year. Milk price and dividends The final farmgate milk price for the 2025/26 season was set at $9.69 per kilogram of milk solids. Fonterra's final organic milk price reached a record $14.13 per kgMS. The co-operative declared a fully imputed final dividend of 33 cents per share, taking total FY26 dividends to 73 cents. That total includes the 24-cent interim dividend and a 16-cent special dividend associated with the Mainland sale. Total dividends were up from 57 cents in FY25. Fonterra is forecasting a Farmgate Milk Price of $9.50 per kgMS for the 2026/27 season, within a range of $8.50 to $10.50. Its forecast organic milk price is $14.30 per kgMS, with a range of $13.30 to $15.30. Milk collections are expected to exceed 1.6 billion kgMS, although Fonterra says it is preparing for the possibility of an El Niño weather pattern. Forecast FY27 earnings are between 65 and 85 cents per share. "Geopolitical volatility remains and with only two months complete, previous seasons tell us that things can always change," Allen says. "The sale of Mainland Group was a significant step forward. Now, as we head into an increasingly changing world, our farmers' quality, grass-fed milk, combined with our flexible assets, reliable supply chain and deep customer and market presence will help us deliver growth into the long-term."

Fonterra hit post Mainland profitability targets two years early. Thu, 24 Sep 2026 0 Comments Fonterra chief executive Richard Allen. Photo / Fonterra Fonterra Co-operative Group hit its post-Mainland Group profitability targets two years early, reporting an operating profit of $1.8 billion.The co-op reported its full-year results on Thursday, reporting a total group operating profit of $3.4b, which included a $1.2b benefit from the divestment of the consumer business.Profit after tax for the year was $2.6b, up 142%.Operating profit from its remaining business was $1.8b, up 23.6% on the year before, with a profit after tax of $1.2b, equivalent to 71 cents per share - an increase of 17c... * Deeply researched, twice-edited and fact-checked news * Annual subscribers also receive a complimentary subscription to The Wall Street Journal * Personalised email news alerts, plus gift up to 5 stories a month to non-subscribers Minimum password length of 8 characters. Require at least one upper and lowercase, numeric, and special character. Annual - including full access to The Wall Street Journal $349.00 Monthly $44.00 All subscriptions auto renew but are easy to cancel. Not convinced yet? The results detail FirstCape's buy of Consilium NZ in 2025. Documents behind $60m Government bailout have been published. A short flight, world-class venues and a culture built for connection - here's the business case for hosting your next event in Fiji Tourism Fiji Five proposed policy principles outline the action being sought from the Government. Vista Group is on track to be the week's top gainer on the NZX 50, up 7.95% since last Friday's close. The stock was trading at $2.85 at 2pm in Wellington. 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