• Bega Cheese generated normalised earnings before interest, depreciation and tax (EBITDA) of $141.7 million in FY2021, up 38 per cent on FY20.
    Bega Cheese generated normalised earnings before interest, depreciation and tax (EBITDA) of $141.7 million in FY2021, up 38 per cent on FY20.
  • Bega Cheese generated normalised earnings before interest, depreciation and tax (EBITDA) of $141.7 million in FY2021, up 38 per cent on FY20.
    Bega Cheese generated normalised earnings before interest, depreciation and tax (EBITDA) of $141.7 million in FY2021, up 38 per cent on FY20.
  • Some of the Bega brands now available in NSW after the acquisition of Lion Dairy & Drinks.
    Some of the Bega brands now available in NSW after the acquisition of Lion Dairy & Drinks.
  • Bega said it was still in a strong position and forecast its normalised FY22 earnings before interest, taxes, depreciation, and amortisation (EBITDA) would be $195 to $215 million.
    Bega said it was still in a strong position and forecast its normalised FY22 earnings before interest, taxes, depreciation, and amortisation (EBITDA) would be $195 to $215 million.
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Dairy giant Bega Cheese’s shareprice has largely recovered after a 12 per cent tumble following its December 23 profit forecast, with the company still set to increase profits by 50 per cent this year. The share price dropped to $4.93 but at press time was trading at $5.48. 

News that Dr Andrew Forrest’s private investment fund Tattarang Agri Investments had become a major shareholder in Bega Cheese after buying a 6.61 per cent stake in the business for $108 million over the course of November and December last year provided a nice three per cent rebound from a slump following the company’s financial guidance that disappointed investors.

In the financial guidance, Bega told the ASX recent Covid-19 developments – both domestically and overseas – were impacting the business despite the dairy market remaining strong. 

“These impacts have been extensive and significant ranging from market disruption in Australian food service channels as a result of lockdowns, structural change in the Chinese infant and toddler dairy nutritional market, significant operational disruption including factory shutdowns, major changes to operations and logistics scheduling, increased safety and testing regimes, major cost increases and shortages across the entire supply chain,” Bega said in the statement. 

The company also told the ASX it expects an increase in farm gate milk prices for the rest of the year due to a drop in demand for milk supply. 

Despite these issues, the company said it was still in a strong position and forecast its normalised FY22 earnings before interest, taxes, depreciation, and amortisation (EBITDA) would be $195 to $215 million, up by potentially 50 per cent on its FY21 EBITDA of $141 million. 

“The company has been very focused on managing the cumulative effect of the direct and indirect costs associated with Covid-19; some of the impacts will be offset by improved market returns and the cessation of a number of one-off costs, however the timing of both price increases and the removal of Covid-19 related costs will affect the business performance for FY22,” the report said. 

In January 2021, Bega acquired Lion Dairy & Drinks for $528 million. The acquisition more than doubled the size of the company, with its annualised revenue reaching nearly $3 billion and employees to more than 4000. It also increased its range of branded products from around 59 per cent of the business to more than 80 per cent. 

The company said it is satisfied with its strategic position, progress on the integration of its acquisition and will continue to invest in its major brands along with growth projects.

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