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- Bega Cheese (BGA) reports a 45 per cent spike in revenue exceeding $3 billion in FY22
- Bega says it achieved its goal of having at least 80 per cent of revenue come from branded products which was helped by the Dairy and Drinks business which was acquired at the start of 2021
- The Aussie dairy and food company also faced its challenges with net profits sliding 69 per cent to $24.2 million
- The company faced supply chain disruptions, largely due to COVID, as well as cost increases and the effects of the floods on the east coast
- BGA shares are up 12.6 per cent to trade at $4.21 each at 3:23 pm AEST
Bega Cheese (BGA) shares were up nearly 12 per cent after releasing mixed results in its full-year report for FY22.
The Australian dairy and food company reported a 45 per cent year-on-year increase in revenue to over $3 billion.
Positively for the company, FY22 was the first full year of owning the Dairy and Drinks business and resulted in Bega achieving its goal of having at least 80 per cent of all revenue through branded products.
External revenue in the bulk segment consists of dairy nutritionals and ingredients and benefited from higher commodity sales prices with bulk segment revenue totalling $529 million.
Bega Cheese acquired the business from Lion Dairy and Drinks in January 2021 and said it was a “transformational” buy that enabled it to further diversify milk sourcing and improve the flexibility and efficiency of the struggling supply chain.
National supply of milk production fell four per cent to 8.5 billion litres over the year.
While revenue grew significantly, the consumer discretionary stock’s statutory earnings before interest, tax, depreciation and amortisation (EBITDA) declined 19 per cent to $149.9 million.
Bega Cheese also reported a hefty 69 per cent drop in net profits from $78 million in FY21 to $24.2 million in FY22.
Executive Chairman Barry Irvin said that both segments contributed to the company’s performance during a time of supply chain disruptions in response to the pandemic and severe weather conditions on Australia’s east coast.
“The importance of both segments of the business was well demonstrated in FY22 with the company able to respond to historically high international dairy commodity prices which assisted in offsetting the impact of increased costs across the supply chain and a very disrupted convenience and food service market in Australia,” Mr Irvin said.
“While some volatility and disruption remains in the supply chain and market the company’s dairy and food brands, dairy ingredients and nutritional capabilities position it well to manage both opportunities and challenges.”
At the end of FY22, Bega Cheese had reduced its net debt by $60 million to $265 million. The reduction arose from operating cash inflows of $158 million and included improved working capital of $73 million.
The company announced a final fully franked dividend of 5.5 cents per share which takes the total dividend for the year to 11 cents per share. The final dividend will be paid on September 23.
BGA shares were up 12.6 per cent to trade at $4.21 each at 3:23 pm AEST.
