Fonterra has returned to profitability after two years of steep losses, but management say there is still work to do.
The co-op reported a $659m net profit, representing a $1.3 billion turnaround from the previous year's record loss.
After a two-year hiatus, the Fonterra will pay a 5 cent final dividend - low compared to market expectations of around 9 or 10 cents.
Fonterra settled on a milk price for the season just past of $7.14 per kg - one of the highest on record - and kept its forecast for the current season within a $5.90 to $6.90 range.
Turnover was up 5 per cent at $21 billion - equating to 6.8 per cent of New Zealand's GDP.
The previous year's $605 million net loss was driven by $826m in writedowns on ill-fated acquisitions.
In the year just past, Fonterra cut a $1.1 billion swathe through its debt mountain - driven in part by asset sales - taking its debt to Ebitda ratio down to 3.4 times from 4.4 times a year ago.
Chief executive Miles Hurrell said the aim was to get debt down to three to 3.5 times Ebitda this year. The ultimate goal is to get it down to 2.5 to three times.
The company still has assets on the table for disposal.
There is China Farms, DPA in Brazil and its remaining stake in China's Beingmate, which now stands at 9 per cent, having been whittled down from 18.8 per cent.
Hurrell said Fonterra was in discussions with interested parties over China Farms.
The sale of its interest in DPA was less advanced than the China Farms sale because of disruption arising from Covid-19.
But chief financial officer Marc Rivers said the underlying performance of DPA was "encouraging" despite Brazil being hit hard by the pandemic.
Hurrell said in terms of Fonterra's strategic "reset" launched a year ago, Fonterra was getting close to its goal.
"I am really pleased with the progress that has been made," Hurrell said in a conference call.
"I'd like to think that we are on the home straight on that reset and we are now certainly turning our attention to growing the top line, and you have seen that in some of the business units this year," he said.
"We still have DPA and China Farms, and completion of the full sell-down of Beingmate to go," he said.
"If we can see our way through those over the coming year, then we will be in good shape," he said.
The modest 5c dividend "recognises the environment that we ware in and that first we have more to do on debt reduction," Rivers said.
Fonterra's earnings outlook of 20-35c a share assumed no "heightened disruption" arising from Covid-19 and an improved trading in China and Asia, in particular.
For the year, Fonterra generated free cash flow of $1.8 billion - up $733m from last year - through improved earnings, lower capex, and the sales proceeds from DFF Pharma and foodspring, and Beingmate shares.
Covid-19 had highlighted Fonterra's breadth and scale, and its ability to change its product mix and move between markets and customers, Hurrell said.
When China went in to lockdown, it meant milk destined for mozzarella manufacture could instead be turned in to milk power, and then yoghurt for the consumer markets.
Commenting on the last GDT auction, which saw a surprise spike in skim milk powder, Hurrell said it highlighted the fact customers had food security concerns and were looking for quality protein.
"They believe in the New Zealand story, so therefore we are staring to get premiums for product coming out of the New Zealand market."
Federated Farmers national president Andrew Hoggard said there was "nothing worrisome" about the result, coming as it did on the back of two years of heavy losses.
"It's good and it's positive," Hoggard, a Manawatū farmer and Fonterra shareholder-supplier, said.
"A lot of people have been pretty despondent about the last couple of years over what has gone wrong, so there is good, positive momentum going forward," Hoggard said. "It will lift a lot of people's spirits."
Hoggard welcomed the dividend but said the milk price was the important one for farmers.
"I don't want them to borrow to pay a dividend," Hoggard said.
"I want it to be a fair reflection of what the profit is."
Fonterra's NZX-listed traded units, last traded at $4.06, having gained 26 per cent over the past 12 months.