Emerging markets boosted Fonterra’s first-half results, the New Zealand dairy giant said today (27 March) but CEO Theo Spierings cautioned demand in Asia was slowing.

Fonterra booked a 33% rise in net profit in the six months to the end of January. Sales were up 8%, partly driven by growing demand from Asia and Latin America.

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However, Spierings said the group was already seeing demand drop in Asia.

He also warned competition was stepping up in Australia, while volatility on the commodities markets is expected to have a negative impact on product mix.

Nevertheless, the cooperative raised its forecast payout for the 2012/13 season to $6.12 for a fully shared-up farmer and narrowed its earnings per share guidance to 45-50 cents per share.

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First-half net profit increased 33% to NZ$459m (US$383.5m). Normalised operating profit, adjusted for the NZ$24m cost of closing its Cororooke plant, rose 26% to NZ$693m.

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The company said gains were driven by a “strong” performance from its New Zealand dairy products unit, which increased volumes and improved margins, as well as growing demand from Asia and Latin America.

Milk volumes collected from Fonterra’s farmer-shareholders rose 6% in the period and sales were up 8% to 2.1m metric tonnes.

Click here for our interview at Fonterra’s press conference in Auckland with CFO Jonathan Mason.