New Zealand's Fonterra reported an annual profit on Thursday that more than doubled and declared a higher final dividend, helped by strong margins from its cheese and protein portfolio.

The world's biggest dairy exporter also benefited from higher prices and strong demand for its dairy ingredients and foodservice channel.

"We are watching market dynamics closely and there are indications demand for New Zealand milk powders will start to return from early 2024," CEO Miles Hurrell said.

Fonterra reported normalised profit after tax, excluding the one-off gain from divestments, of NZ$1.33 billion ($788.3 million) for the year ended July 31, compared with NZ$591 million, a year earlier.

Fonterra declared a final dividend of 40 NZ cents per share, compared with 15 NZ cents declared last year.

($1 = 1.6872 New Zealand dollars)

(Reporting by Himanshi Akhand and John Biju in Bengaluru; Editing by Shounak Dasgupta and Shweta Agarwal)