Fonterra Shareholders' Fund reports strong 2025 performance, targets capital return

The Fonterra Shareholders' Fund (FSF) reported strong performance for the year ended July 31, 2025, with continuing operations' operating profit reaching NZD 1.44 billion, up from NZD 1.25 billion. Earnings per share remained steady at 71 cents, while total cash distribution rose to NZD 0.57 per unit, up from 55 cents. The total shareholder return (TSR) since December 2024 was 68%, significantly outperforming FCG at 50% and the S&P NZX50 Index at 5% over the same period.

Fonterra also detailed its divestment update, targeting a tax-free capital return of NZD 2.00 per share. Shareholder approval for this capital return requires at least 75% of votes cast at a special meeting planned for February 19 next year. The company is focusing on more efficient capital use, with a FY25 return on capital of 10.9%, which is above its 5-year average and within its long-term target range.

Looking ahead to FY26, Fonterra forecasts farmgate milk price between NZD 9.00 and NZD 10.00 per kgMS, with earnings projected at 45-65 cents per share. Key priorities include completing the Mainland Group divestment, returning capital to shareholders, and expanding manufacturing capacity through projects like Edendale UHT cream and Studholme proteins, alongside the Clandeboye butter expansion.