Fonterra's annual profit has soared by 65 percent, after an "incredibly difficult" year for farmers.
The country's biggest company made a net after tax profit of $834 million, compared with $506m last year.
Sales fell 9 percent to $17.2 billion, but earnings rose as the lower cost of milk pushed up margins of products such as cheese, yoghurt and infant milk formula in key markets, including China.
"We are moving more milk into higher-returning consumer and food-service products while securing sustainable ingredients margins over the GlobalDairyTrade benchmarks, especially through speciality ingredients and service offerings," said chairman John Wilson.
He said the past year had been "incredibly difficult" for farmers and rural communities because of the slump in prices and the farmgate milk payout.
Fonterra has slashed close to $1 billion in costs and sacked hundreds of staff over the past couple of years to improve returns in the face of decade-low milk prices.
"Through increased earnings and continuing financial discipline we have increased the return on capital and strengthened our balance sheet by significantly reducing debt," Mr Wilson said.
Mr Wilson said the co-operative, which is the world's biggest dairy exporter, is operationally and financially stronger.
Fonterra confirmed the farmer payout for the just-finished season at $4.30 a kilo of milk solids.
Yesterday it raised its forecast payout for the current season to $5.25 a kilo on the back of improved prices and falling production around the world.