Net debt came to $5.6 billion, down 3 per cent.
Fonterra kept to its full-year forecast normalised earnings forecast of 25-35 cents per share.
It also left unchanged its farmgate milk price forecast for the current year of $7.30 to $7.90 per kg of milksolids, with a $7.60/kg midpoint.
Fonterra said supply chain issues worldwide had resulted in a buildup of inventory.
Chief executive Miles Hurrell said Fonterra was pleased with its reported profit of $391m.
While down on this time last year at a headline level, the 2020 financial year benefited significantly from the divestments of DFE Pharma and foodspring, he said.
Despite the major impact Covid-19 was having around the world, the co-op is staying focused on what it can control, he said.
"While we've been fortunate here in New Zealand, many of our people overseas are still in lockdown and have now been working from home for 12 months."
Hurrell said the co-op has had "a great first six months", with a total group normalised gross margin of 17.4 per cent (from 16 per cent) and total group normalised operating expenditure down $37m.
"Our standout performer continues to be Greater China."
Listen to Jamie Mackay interview Fonterra chief financial officer Marc Rivers on The Country below:
China delivered a 38 per cent increase in normalised EBIT to $339m, reflecting the strength of Fonterra's foodservice business in this region, improvements in its consumer business and the PRC's strong economic recovery following the initial impact of Covid-19.
Asia Pacific's normalised EBIT was up 9 per cent to $190m as a result of improvements in Foodservice and Consumer.
Fonterra's consumer division benefited from more people staying at home and cooking with dairy and a renewed focus on the Anchor, Anmum and Anlene brands.
Normalised EBIT from Africa, Middle East, Europe, North Asia, Americas (AMENA) came to $201m, down 7 per cent because of lower sales volumes in its ingredients business.
Commenting on the global supply chain challenges, Hurrell said the co-op was "proactively managing the situation" and working with its ocean freight partnership Kotahi to keep product moving.
"Our sales book is well contracted – however, as a result of some small shipping delays, our product inventory is higher than it was this time last year and this means our investment in working capital is also higher.
"By the end of the financial year we expect this to be back to more normal levels as we have confidence in our supply chain to get product, already contracted, delivered to our customers."
