Bega positioned for growth after profit boost
Bega Cheese says it is well positioned to take advantage of growth opportunities in dairy and food after posting what it described as a solid first half 2018 financial year result.
Bega achieved a AUD $20.6 million profit after tax for the first half of its 2018 financial year, a 31 per cent increase on its first half 2017 profits after tax.
Within the first half of Bega’s 2018 financial year, Bega increased its milk intake by 25 per cent, driving a 19 per cent volume growth in cream cheese and 33 per cent growth in mozzarella cheese.
Executive Chairman of Bega, Barry Irvin, said Bega performed particularly well when taking into account the costs involved in its recent acquisitions and the highly competitive environment it operates in.
In October 2017, Bega acquired the old Victorian Kraft peanut butter factory.
In January 2018, Bega completed an acquisition of the Peanut Company of Australia.
Chief Executive Officer of Bega, Paul van Heerwaarden, said the long term strategy of Bega’s business is key to delivering consistent results despite market volatility and aggressive competition.
“We have long held the view that we must expect the challenges and the opportunities in our business to constantly change and we should direct strategy and investment to deal with that change,” Heerwaarden said.
Bega said it has increased investment in Vegemite and Zoosh brands and will spend FY18 investing in promotion to ensure the change from Kraft to Bega branded peanut butter is successful.
Irvin said that the benefits of the increased milk volumes in the first half from a successful milk acquisition program and strong spring intake would not be repeated at the same level in the second half of 2018 FY.
Bega forecasts its 2018 EBITDA to be between $105 – $115 million, “while observing that there remained acquisition opportunities in both dairy and food in the short term”.
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