New Zealand-based dairy co-operative Fonterra has posted 18% rise in net profit after tax to $346m for the half year ended 31 January 2012, due to improved margins in the Standard & Premium Ingredients business.

Chairman Henry van der Heyden said the company had performed well particularly given the turmoil in global markets.

"Good spring and early summer growing conditions across most of the country (with the notable exception of the lower South Island) led to strong growth in New Zealand dairy production and record volumes. Fonterra’s milk collections for the season to date were up 10 per cent on the same period in 2011. These record milk collections flowed into record production, with a new export volume record achieved in December 2011," Heyden said.

"International dairy prices softened after the highs of last year but remained relatively stable throughout the first half of the year. These prices were supported by strong demand for quality dairy ingredients in emerging markets across a number of Asian economies, as well as Brazil and China, offsetting economic uncertainty in Europe."

CEO Theo Spierings said Standard & Premium Ingredients businesses had a strong first half, with a 10% rise in revenue to $8bn, achieved from higher sales volumes, and a 10% increase in average US dollar sales prices.

"The Standard & Premium Ingredients businesses’ normalised EBIT2 was 44 per cent higher than the same period last year," Spierings said.

The company’s total sales volume grew 51%, reflecting growing global demand for dairy ingredients and branded consumer products.

The co-operative’s revenue increased 7% to $10bn because of higher volumes and commodity prices.

Fonterra’s revenue from Australia and New Zealand market came down 4% to $2bn, compared to $2.1bn in 2011.

Revenue in the region was majorly affected by a difficult retail environment and product price war between companies.

In the Asia, Africa and Middle East market, revenue was up 7% to $947m due to steady consumer demand.

The dairy major’s sales volume in the region increased 44%, compared to the period in 2011.

The company’s revenue in Latin America came down 5% to $385m, driven largely by Soprole in Chile.