Fonterra Co-operative Group (FCG) H1 2026 earnings summary

Executive summary

• Strong half-year and first-half results with revenue of $13.9 billion, operating profit of $1.2b (up $124m), and return on capital of 11.2%, driven by higher milk prices, robust Foodservice and Ingredients performance, and improved product mix.

• Profit after tax increased to $750m, up $21m year-over-year, with higher earnings offset by increased tax expense.

• Interim dividend of 24 cents per share and special Mainland dividend of 16 cents per share declared, both fully imputed.

• Completed divestment of Mainland Group for $4.22 billion, enabling a $3.9 billion capital return and special dividend.

• Focused on growing value as a global B2B dairy provider and enhancing operational efficiency.

Financial highlights

• Revenue from sale of goods grew 11% year-over-year to $13.9b for the six months ended 31 January 2026.

• Milk supply reached 1,565 million kgMS, up from 1,509 million kgMS year-over-year.

• Normalised EPS rose to 51c (up from 47c); return on capital improved to 11.2% (up from 10.4%).

• Net debt reduced to $4.9 billion from $5.5 billion, supporting increased dividends and lower leverage.

• Gross margin slightly decreased to 17.2% from 17.7% year-over-year.

Outlook and guidance

• FY26 Farmgate Milk Price forecast midpoint set at $9.70 per kgMS (range $9.40–$10.00), reflecting positive market conditions.

• Full-year forecast earnings range 50–65 cents per share, with performance tracking toward the top end, subject to Middle East risks.

• Three-year earnings target reaffirmed, with no change in commitment.

• Milk supply outlook revised from flat/slight decline to flat/slightly up, weather-dependent.

• ERP program remains on track and on budget, with cost phasing adjusted between FY 2026 and FY 2027.