New Zealand’s Fonterra expects to continue paying dividends after asset sales and a focus on its domestic business helped the world’s largest dairy exporter get back into profit.

The company reduced its debt by more than $NZ1 billion in fiscal 2020 and paid a final annual dividend of five NZ cents per share, compared with no payout last year.

“This year marks a return to paying dividends, a position we expect to maintain in the future, assuming normal operating conditions,” Chairman John Monaghan said on Friday.

Fonterra last year unveiled a “back to basics” strategy that called a halt to the previous management’s failed overseas expansion plans and pledged to cut debt by focusing on domestic production.

This helped the dairy exporter report a net profit of $NZ659 million for the year ended July 31, compared with a loss of $NZ605 million in fiscal 2019 that was largely driven by asset write-downs.

For fiscal 2021, it has kept its earlier guidance for the farmgate milk price – the price it pays to farmers for milk – of between $NZ5.90 and $NZ6.90 per kilogram of milk solids.

It also forecast normalised annual earnings per share between 20 NZ cents and 35 NZ cents, compared with 24 NZ cents per share a year earlier.

Fonterra accounts for about 30 per cent of the world’s dairy exports and is New Zealand’s largest company.

Its best known brands include Anchor milk and Mainland cheese.