Dairy co-operative Fonterra's full year net profit has nearly tripled, with revenue growth of 12 percent.

The dairy exporter said the strong result reflected the execution of its strategy, against a backdrop of weak farmgate milk prices.

Key numbers for the 12 months ended July compared with a year ago:

• Net profit $1.58b vs $583m
• Revenue $26.05m vs $23.4b
• Profit from continuing operations $1.54b vs $752m
• Normalised net profit 95 cents per share vs 36 cps
• Net debt $3.2b vs $5.3b
• Milk payout $8.22 per kilogram of milk solids vs $9.30 per kgMS
• Final dividend 40 cps vs 15 cps
• Full year dividend 50 cps plus 50 cps capital return to shareholders.

"Our FY23 performance demonstrates that we are focusing on the right strategic priorities. This said, we are aware that there are challenging conditions on the ground for many of our farmers," chief executive Miles Hurrell said.

"Our 2022/23 season farmgate milk price was impacted by reduced demand for whole milk powder from key importing regions."

Average whole milk powder prices fell 16 percent from the 2021/22 season.

"We are watching market dynamics closely and there are indications demand for New Zealand milk powders will start to return from early 2024," he said.

The co-operative was forecasting a farmgate milk price in a range of between $6.00 and $7.50 per kilogram of milk solids for the 2023/24 season.

It also expected to make a profit of between 45-to-60 cents a share in the coming year, which compared with 95 cents in the year just ended.

The co-op also reported a 12 percent return on capital for the last 12 months, compared with 6.8 percent the year earlier.

Hurrell said demand for other products, including foodservice and our value-added ingredients, continued to be robust.

"There were a number of key drivers that helped us deliver this result, including favourable margins in our ingredients channel, in particular the cheese and protein portfolios," he said.

"We also saw improved performance in our foodservice channel due to increased product pricing and higher demand as Greater China's lockdown restrictions started to ease from the start of calendar year 2023."

This story was originally posted on RNZ News