Invercargill-based Alliance Group said its pre-tax profit rose by 26.7 per cent to $10.1 million in the year to September, despite difficult market conditions.
Chairman Murray Taggart said the year had been challenging for farmers, but that the co-operative had strengthened its balance sheet considerably.
"Global market prices have been at their most difficult in the last five years and any recovery in prices since May has been more than offset by the foreign exchange levels, in particular, sterling and US dollar," he said.
"However, the weather conditions across the country have also became more favourable as the year progressed, which has provided a significant boost for our farmers," Taggart said in a statement.
The co-operative's business transformation strategy was resulting in tangible benefits that had exceeded expectations, delivering gains of $56m compared to the budgeted $34m, Taggart said.
Alliance, which is New Zealand's biggest sheepmeat processor, said its debt fell from $129m to $41m and that it carried no seasonal debt.
"Although we're still in the early stages of a transformation, our strengthened balance sheet and a fitter business means we're on track to take advantage of global opportunities as we continue to build a stronger, more resilient co-operative, for the benefit of our farmer shareholders," Taggart said.
Chief executive David Surveyor the weakening of market prices and global volatility over the year reduced group revenues but that the co-operative was able to act as a buffer and absorb some of the impact on its farmer shareholders.