Dairy co-operative Fonterra has delivered a strong full-year operating profit of $3.4 billion, thanks in part to $1.2b from the sale of its Mainland brands.

However, even when stripping out the sale, underlying profit was up nearly 24 percent to $1.8b, with after-tax profit of $1.2b, equivalent to 71 cents per share.

The company had set a target to replace lost earnings from the Mainland asset sales within three years.

However, Fonterra said it had achieved that goal in one year and will no longer report that target.

Fonterra sold its Mainland brands to French company Lactalis last year.

Total revenue for Fonterra for the year was $27b, with nearly $20b in cash returns to New Zealand farmers.

Fonterra chief executive Richard Allen said the co-operative's disciplined approach to strategic execution has once again generated strong results.