Fonterra’s performance during the first quarter of financial year 2026 indicates a solid start and firm focus on strategic delivery.
Fonterra CEO, Miles Hurrell, said the co-operative’s total group earnings for Q1 of 2026 are in line with this time last year, while noting the higher global commodity prices in the period compared to last season.
“Our total group profit after tax for Q1 is $278 million [$242.83 million AUD], up $15 million [$13.10 million AUD], and is equivalent to 17 cents [15 cents AUD] per share,” he said.
“When excluding the costs associated with the consumer divestment, Fonterra’s normalised earnings per share are 18 cents [17 cents AUD] up slightly on last year.
“Continuing operations delivered a profit after tax of $158 million [approx. $138 million AUD], equivalent to nine cents [7.9 cents AUD] per share, slightly down on the same period last year reflecting differences in sales phasing.
“We maintain our full year earnings range for continuing operations of 45-65 cents [39-57 cents AUD] per share.”
Fonterra is continuing to make strong progress on implementing its strategy.
The company has provided an update on the sale of its Mainland Group business to Lactalis which was announced in October.
According to Fonterra, the next steps in this process include securing regulatory approvals and separating the Mainland Group business from the co-operative.
Some of the regulatory approvals required have been obtained, including approval from its overseas investment office in New Zealand.
Lactalis confirmed that they have received these approvals this week.
Other regulatory approvals are still pending.
Subject to these steps being achieved, Fonterra continues to expect the transaction to complete in the first half of the 2026 calendar year.
Another shareholder vote will be required for the payment of the capital return, which will be implemented by way of a court approved scheme of arrangement.
Fonterra expects the shareholder vote on the capital return to occur on 19 February 2026 and the notice of meeting to be issued by the end of January 2026.
Holding the shareholder vote early in 2026 will enable the co-operative to return capital to shareholders and unit holders as soon as possible after the transaction is complete.
If the capital return is approved by shareholders, Fonterra will then seek final court approval to undertake the return of capital subject to the sale completing.
Hurrell said this divestment is a significant milestone for Fonterra and its growth plans over the next few years.
“We are firmly focused on delivering the commitments we’ve made, not least our target to lift earnings back to FY25 levels by FY28, offsetting the impact of the divestment of Mainland Group,” he said.
“To support this goal, we are progressing with plans to invest up to $1 billion over the next three to four years in projects to generate further value and drive operational efficiencies.”
Fonterra will now target a tax-free capital return of $2 NZD ($1.75 AUD) per share to shareholders and unit holders – equivalent to around $3.20 billion NZD (approx. $2.79 billion AUD) – once the Mainland Group sale is complete.
Fonterra also revised its forecast farmgate milk price range for the season from $9.00-$11.00 NZD ($7.86-$9.61 AUD) per kgMS to $9.00-$10.00 NZD ($7.86-$8.73 AUD) per kgMS, with a new midpoint of $9.50 NZD ($8.30 AUD) per kgMS.
This is off the back of strong global milk collections putting downward pressure on commodity prices, with the co-operative revising its forecast collections for the season from approx. 1.53 billion kgMS to approx. 1.56 billion kgMS.
In other news, Australia’s leading supply chain and logistics trade show, MegaTrans, has unveiled its panel of speakers for its upcoming 2026 event.
