(Reuters) – New Zealand dairy company Fonterra said on Monday it has improved its dividend payout policy and will now pay shareholders between 60% and 80% of its profits, compared with an average of 50% over the five previous years.
The company is also targeting a higher average return on equity, raising it to 10-12%, up from 9-10% previously.
“Fonterra is in a strong position, generating results well above its five-year average, putting it in a position to think about the next evolution of its strategic delivery,” said chief executive Miles Hurrell.
Last week, the Auckland-based company reported fiscal 2024 earnings from continuing operations of 70 New Zealand cents per share, hitting the high end of its outlook range.
It declared a final dividend of 25 New Zealand cents per share, as well as a special dividend of 15 New Zealand cents each.
The company said it intends to realize a “significant” return of capital for shareholders following the divestment of its consumer business.
Earlier this year, it had announced a full or partial sale of its global consumer unit to free up capital.