Bega Cheese has reported a 69 percent decline in after-tax profit to $24.2 million as it battled COVID-19, rising costs and supply chain disruptions.
Gross revenue increased 45.2% to $3.01 billion, with 80% coming from branded products, while EBITDA fell 18.8% to $149.9 million.
The owner of Vegemite and a host of other milk brands said the legal result reflects several non-recurring items, primarily acquisition and integration costs, offset by proceeds from the termination of two contracts with the consumer goods giant. Reckitt consumption.
Normalized profit after tax increased to $46.2 million, compared to $39.6 million in FY21. Normalized EBITDA, which excludes integration costs of the Lion Dairy and Drinks business and benefits from the termination of the Reckitt’s contract, amounted to $180.1 million.
Chairman Barry Irvin said the impact of COVID-19 had been significant, with disruptions throughout the supply chain. He added that the war in Ukraine has significantly increased the cost of oil, packaging and other basic products, and that early retirements, labor availability and weather conditions have been major factors in declining milk supply in the farm.
“Decreasing supply coupled with historically high international commodity markets has seen strong competition for milk continue through fiscal 2022 and accelerate in fiscal 2023,” he said.
In his outlook comment, CEO Paul van Heerwaarden COVID-19 and supply chain disruptions have leveled off. But he said inflationary pressures and how the company mitigates costs present an “immediate challenge,” signaling significant cost increases in fiscal 2023.
Mr. Heerwaarden added that the benefits of rising consumer prices began to flow in FY23, with the full impact to be felt in FY24, and he expects competition for milk on the farm to “continue to continue.” being solid” this year.
Bega confirmed July earnings guidance’s normalized EBITDA range of $160 million to $190 million.