Fonterra said its net profit fell by 19 per cent to $624 million in the 2011-12 year, mostly due to the unavailability of tax credits.
The dairy cooperative said tax credits of $202 million in the previous year were not repeated in the year just passed.
Excluding those credits, Fonterra's net profit after tax improved by 10 per cent, it said.
Revenue for the year was flat at $19.8 billion.
The farmgate milk price for the 2011-12 season just passed was set at $6.08 per kg of milksolids, slightly ahead of a forecast of $6.05, but down down from $7.60 last year.
Fonterra said the decline in the milk price was because of lower commodity prices and a strong New Zealand dollar.
Chairman Sir Henry van der Heyden said the 2012 year saw record dairy production all around the world.
He said global dairy demand held up reasonably well but that an "ocean of milk" impacted on global commodity prices, with the GlobalDairyTrade (GDT) index reaching its lowest value in 34 months in May.
"This contributed to a lower farmgate milk price in the 2012 year, however, the impact of this decline on overall earnings for farmers has been eased a little by the much higher volumes of milk they produced," he said in a statement.
- Record New Zealand milk flows, up 11 per cent
- An 11 per cent increase in export volumes to 2.32m tonnes.
- Sales volumes up 2 per cent to 3.94m tonnes.
- Higher operating cash flows of $1.4b, up $206m.
- Gearing ratio fell to 39.1 per cent from 41.8 per cent.
Fonterra announced in August a forecast Farmgate Milk Price for the 2012/13 season of $5.25 per kg of milksolids.
In today's release, it said it could not offer any other forward-looking comment because it was in a "blackout" period until the release of its prospectus for the Trading Among Farmers share trading scheme, which is expected to come to the market before the year's end.
"Accordingly, the co-operative will not be updating its earnings forecast at this time," it said.
The farmer-owned New Zealand co-operative is the largest processor of milk in the world, producing more than two million tonnes of dairy ingredients, value added dairy ingredients, specialty ingredients and consumer products every year.