Chairman Henry van der Heyden said yesterday the board was taking the step given unstable financial markets and commodity prices, but it has also taken a hit from the contaminated milk issue in China, which resulted in a $139 million write-down to $62 million the value of its 43% stake in dairy company Sanlu.
A change in balance date means this year's result is for 14 months to July 31, compared to a 12-month period a year earlier.
Record commodity prices saw revenue rise from $13.7 billion to $19.5 billion, despite an average exchange rate of US74c and last year's drought slashing production by 4.3% at 1192 million kg of milk solids.
Revenue growth was most pronounced in Asia, the Middle East and Latin America, while commodities and ingredients and sales in New Zealand and Australia were flat.
Profit from its Australian and New Zealand business before depreciation, amortisation and non-recurring items, was $158 million for the 14 months under review compared to a 12-month profit a year earlier of $73 million in 2007.
Asia and Middle East returned a profit of $96 million and Latin America $119 million.
Chief executive Andrew Ferrier said consumer resistance to record international dairy prices, the collapse of the United States financial markets and soaring prices for food and fuel had dampened demand.
This was felt most acutely in its commodities and ingredients business, where its profit slipped from $1.3 billion in 2007 to $824 million.
"Higher milk costs and reduced margins in Fonterra Ingredients as a result of higher commodity prices were contributing factors."
The cost of goods sold increased 55% to $16.8 billion, reflecting the record milk price, high global prices pushing up the cost of product sourced outside New Zealand, rising fuel and energy costs and the longer period under review.
Mr Ferrier said the higher milk price accounted for the majority of this increase.
The 14-month review period was also attributed as the main reason operating expenses rose from $1.7 billion to $2.2 billion.
The co-operative has retained a profit of $235 million, including minority interests.
Mr Ferrier said there had been a major drop in global commodity prices and that decline was more rapid than the New Zealand-US exchange rate depreciation.
In addition, US dairy farmers had increased production, which would also soften global prices.
"With buyers playing a waiting game, there is a possibility of further softening of prices before supply and demand come back into balance," he said.
