New Zealand dairy giant Fonterra posted a bumper annual profit Friday, putting the world's largest dairy exporter back in the black after two years of heavy losses.

Fonterra announced a net profit of 659 million New Zealand dollars (445 million U.S. dollars) for the 12 months to July 31, rebounding from a 605 million New Zealand dollars loss the previous year.

The company reduced its debt by more than one billion New Zealand dollars (675.40 million U.S. dollars) and paid a final annual dividend of five New Zealand cents per share, compared with no payout last year.

Chief executive Miles Hurrell said Fonterra experienced a strong first half to the financial year but the COVID-19 pandemic affected the second half. "As we moved through the second half, we saw restaurants, cafes and bakeries close and intermittent spikes in supermarket sales, creating uncertainty across the global dairy market," he said.

Chairman John Monaghan said the health crisis made providing a detailed outlook difficult as new waves of infection and the virus-induced global slowdown would affect demand in unpredictable ways.

"We need to stay agile and draw on our strengths across the supply chain to manage and adapt to the changing global situation," he said.

Fonterra is planning to expand in China, its largest market. The company, which sells dairy products under brands like Anchor and Anlene is investing in a new research and development site in Shanghai, and plans to establish a new application center in central China' Wuhan in 2021.

(With input from agencies)