Fonterra has announced its second highest ever milk payout of $6.70 for the 2009-10 season.

The payout is up from $5.21 for 2008-09.

The total is made up of a Milk Price of $6.10 per kilo of milk solids, and an annual dividend of 27 cents per share with retentions of 33 cents per share.

Fonterra chairman Sir Henry van der Heyden says the result is pleasing given domestic and global economic conditions.

“The key thing here is Fonterra has come through the global recession in very good shape, and that’s reinforced by where our gearing ratio is and I’m sure it’s no surprise to many of you there are quite a few companies that have fallen by the wayside in New Zealand and also in the global marketplace.”

The co-op has also announced an after tax profit of $685m – 12 per cent up on last year.

The balance sheet has been helped by an $862m increase in equity – due largely to shareholders investing an extra $459m in the co-op in the form of additional shares.

“Our farmers, through the purchase of dry share and the purchase of shares and retained earnings have contributed an equity of $862m to this co-operative," Mr van der Heyden said.

"So our farmers have really got behind the co-operative and as a consequence of that our gearing ratio has come down quite considerable [sic] compared to last year.”