Bega Cheese full year profits slide
Australia’s largest listed dairy firm, Bega Cheese Group, has announced an 11.4% drop in profits for the financial year ended on 30 June 2011.
The Group’s full year results, just published, show total sales revenue to be A$931.7 million, with a net profit after tax of A$21.6 million.
Bega Cheese is the largest provider of contract cheese packaging and processing services in Australia. The company’s product range includes cheddar, mozzarella, processed cheese, cream cheese, milk powders, infant formula, and other nutritional products for sale in Australia and international markets.
The Bega Cheese Group’s capital expenditure for 2010/11 totalled A$24.8 million. The Group’s biggest investment was in the natural cheese cutting and packaging capacity at Bega Cheese’s recently acquired Strathmerton facility in northern Victoria.
Chairman of the Bega Cheese Group, Barry Irvine said, “The significant investment in excess of A$66m in capacities and capabilities over the past three years positions Bega Cheese well to take advantage of already identified dairy industry rationalisation and market growth opportunities.”
Mr Irvine also said that the Bega Cheese Group’s long term contracts with major global dairy companies such as Fonterra, Kraft and Mead Johnson Nutritionals gave the company the confidence to continue to invest in efficiencies, innovation and capacity.
Australian Food News comments:
The profit drop at Bega points to the continuing pressures on domestic dairy product suppliers. By contrast, strong export prices for commodity dairy products, such as milk powders are supporting strong profit growth for those Australian dairy processors trading internationally.
Australian Food News has recently published several stories on dairy companies’ full year results. Warrnambool Cheese and Butter announced yesterday that it has more than doubled its operating profits for the year to 30 June 2011. New Zealand-based dairy co-operative multinational Fonterra announced earlier this month that it has decided to cut back on the niche organic milk production business. Lion, the Kirin-owned drinks company, has also reported challenging conditions and declining revenue this month.
Both Bega and Lion are based in the State of New South Wales and have borne the brunt of the house-branded milk issues of supermarkets being supplied by lower-cost milk produced in other States such as Victoria.