Fonterra with Decline in Profits Due to Increased Tax Burdens

Fonterra, the world's leading milk exporter, has reported a 4.3 percent decrease in its annual profit, attributed to increased tax liabilities. This rise in tax costs resulted from a change in the treatment of profit distributions to farmer shareholders. In the future, the company will no longer base deductions on these profits but will instead add so-called imputation credits to them. This strategy aims to avoid double taxation on corporate profits. Despite these changes, Fonterra forecasts an unadjusted normalized earnings per share between 45 and 65 New Zealand cents for the fiscal year 2026. This represents a decline from the 71 cents per share achieved in the current fiscal year. In the completed fiscal year, which ended on July 31, Fonterra reported a post-tax profit of 1.08 billion New Zealand dollars, equivalent to approximately 627.8 million US dollars. This is a decrease compared to the previous year's profit of 1.13 billion New Zealand dollars. At the same time, however, the dairy giant positively surprised with an increased final dividend of 35 New Zealand cents per share, following a payout of only 25 cents in the previous year.