New Zealand dairy giant Fonterra reported a 183 percent rise in annual net profit on Thursday as cost-cutting paid off late in the financial year despite "extremely challenging" market conditions.

Fonterra, the world's largest dairy processor, said net profit for the year to July 31 was NZ$506 million ($317 million), up from NZ$179 million the previous year.

Fonterra said global milk prices had fallen 36 percent in the past 12 months but the cooperative had responded by becoming leaner and more efficient.

"We focused on improving our sales mix, achieving more efficiencies, maximising our gross margins and achieving our strategic goals faster," chief executive Theo Spierings said.

"Our efforts contributed to a second-half rebound in our performance and profitability."

Savings measures include 750 job losses announced in recent months.

Fonterra announced a final dividend of 25 NZ cents and lifted its 2015-16 season milk price forecast -- the amount it pays to its 10,000-plus farmers -- to NZ$4.60 per kilogram, a 75 NZ cent increase.

While dairy prices have shown signs of recovering from 12-year lows, Spierings said the market was tough to read and "likely to be difficult in the medium term".

"This year's market is one of the most difficult I've known," he said.

Spierings said demand had been affected by geopolitical turmoil in the Middle East and Russia, Ebola in Africa, falling oil prices and, most crucially, a slowdown in China, which had previously fuelled a massive boom in dairy products.

He said the efficiency measures Fonterra had taken meant "we will be more than ready when the market turns".

Overall, earnings rose 94 percent to NZ$974 million and sales volumes lifted nine percent to 4.3 million metric tonnes.