Fonterra Shareholders (FSF) H1 2026 earnings summary

Executive summary

• Strong half-year results with revenue of $13.9 billion, operating profit of $1.2 billion, and return on capital of 11.2%, all up year-over-year, driven by improved pricing, product mix, and robust performance across all business segments.

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

• Completed divestment of Mainland Group for $4.22 billion, enabling a $3.2–$3.9 billion capital return and special dividend.

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

• Management transition noted, with CEO delivering final results presentation.

Financial highlights

• Revenue grew 11% to $13.9 billion for the six months ended 31 January 2026.

• Operating profit: $1,231 million (up from $1,107 million year-over-year); operating profit margin improved to 8.8%.

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

• Net debt reduced to $4.9 billion, supporting increased dividends.

• Cash operating expenses per kgMS forecast at $0.98, ahead of FY26 target.

Outlook and guidance

• FY26 Farmgate Milk Price forecast midpoint $9.70 per kgMS (range $9.40–$10.00), down from $10.16 last season.

• FY26 full-year earnings guidance raised to 50–65c per share.

• H2 expected to see higher sales volumes but margin compression due to rising input costs.

• Three-year earnings target reaffirmed, with ongoing cost reduction and operational efficiency initiatives.

• Guidance range maintained due to potential Middle East risks and global volatility.