New Zealand dairy export giant Fonterra is proposing a minimum $NZ7.10 ($A6.61) farmgate milk price this year after posting a bumper third-quarter earnings result.
On Thursday morning, chief executive Miles Hurrell announced a $NZ815 million ($A759 million) earnings before interest and taxes to April 30.
"The work done over the last year to strengthen our balance sheet, and the co- op's ability to respond quickly has helped us manage the COVID-19 situation over the last few months," Mr Hurrell said.
The full-year earning guidance is 15-25 NZ cents per share.Agriculture was labelled essential during New Zealand's lockdown and was one of the few industries able to keep doors open.
Mr Hurrell said ingredients (up nine per cent to $NZ668 million), consumer (up 46 per cent to $NZ187 million) and foodservice (up 54 per cent to $NZ208 million) divisions grew their earnings despite COVID-19 hits.
"In China, the foodservice sector started its recovery relatively quickly, although it is still not at 100 per cent," Mr Hurrell said.
"We saw our sales in China fall in February, but they bounced back to more normal levels in March and this continued in April."
The joint-listed company is continuing to reduce debt, and Mr Hurrell says it is on track to deliver its hefty gross margin target "with gross margin up $NZ244 million on last year to $NZ2.5 billion".
While this year's farmgate milk price has been set at $NZ7.10 to $NZ7.30, next year's price has been windowed at $NZ5.40 to $NZ6.90 per kgMS due to worsening global prices.
- With AAP
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