Fonterra's normalised profit for the six months to January was up 43 percent to $418 million, the dairy co-operative announced on Wednesday.
The company had a reported profit after tax of $391 million, a drop of 22 percent.
The lower total reported profit was due to the company making a number of one-off asset sales last year which meant though the co-op had higher earnings "at a headline level" in the 2020 financial year the figures were not a true reflection of its underlying performance, said chief executive Miles Hurrell.
"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.
Hurrell said the company's "standout performer" was its Greater China business, which delivered a 38 percent increase in normalised earnings before interest and tax.
After selling a number of its own farms in China last year in a bid to pay down debt and focus on New Zealand farmers' milk, Hurrell said Fonterra had also decided to undertake a sales process for its joint venture (JV) farms in the country.
"We expect the sales of our farms to be completed this financial year and the sale of the JV farms to be completed this calendar year," he said.
The company also said in light of the "positive" results it would resume paying a dividend of five cents.
In announcing the results, Hurrell reaffirmed the co-op's forecast farmgate milk price range of $7.30-$7.90 per kilogram of milk solids and forecast normalised earnings guidance of 25-35 cents per share.
But despite the strong first half-results, Hurrell said the company's earning performance was expected to "come under significant pressure in the second half".
"The strong milk price is great for farmers. It's good for New Zealand too - with a mid-point of $7.60 per kgMS, it would see us contribute more than $11.5 billion to the New Zealand economy," he said.
"However, the increasing raw milk prices through the first half and now into the second half puts a lot of pressure on our sales margins and this will be seen through the second half of the year.
"We will face into this challenge in the same way we are with others - that's focusing on what's in our control and staying on strategy."