- Bega Cheese’s revised annual earnings are down several million dollars following a drought-ridden year
- Milk production for the FY19 was down 7.9 per cent as a consequence of the droughts
- Bega’s share price has taken a slight hit this morning, down 2.03 per cent, currently sitting at $4.34 per share
Aussie dairy company Bega Cheese told the stock market this morning yearly earnings will be lower than expected.
Earnings before interest, tax, depreciation and amortisation were earlier announced to fall between $123-$130 million for the 2019 financial year.
However, on revision it appears this number is set to drop to between $113-$117 million.
Damaging drought seasons throughout Australia has impacted the milk market, taking a toll on Bega’s business.
Milk production decreased by 7.9 per cent, equivalent to 733 litres, as a consequence of drought and the exit of farmers.
Additionally, Bega notes competitive processing pressure is at its highest level, and will continue into the 2020 financial year, having an effect on milk prices.
Despite the pressures faced by the dairy sector during the 2019 financial year, however, Bega broke its record for milk intake, hitting 1.06 billion litres. This is an increase of 41 per cent, equal to 308 million litres, in comparison the the previous year.
According to the company, “the Bega Cheese strategy is well positioned to ensure the changes in the milk supply landscape are reflected in greater production and logistics efficiency”.
Strengthening supplier bases and increasing earnings from non-dairy avenues are also goals for the company going forward.
Bega’s share price has taken a slight hit this morning, down 2.03 per cent, currently sitting at $4.34 per share.