Bega posts major half-year profits

The Aussie dairy processor and food manufacturer has recorded profits across the board including a profit after tax increase of 170 per cent.

Australian dairy processor and food manufacturer the Bega Group has posted strong half-yearly results, led by a profit after tax increase of 170 per cent.

Bega reported statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $109.3m in the first half of 2024-25, an increase of $23.2m or 27 per cent compared to the same period last financial year.

The company also reported a normalised profit after tax of $35.9m, a 170 per cent increase compared to $13.3m reported last year.

Year-on-year Bega also recorded a 3 per cent increase in revenue, which rose to $1.8bn with the recovery of the bulk segment - the dairy processing element of the business - a key factor.

The company told investors realignment between dairy commodity and farmgate milk prices returned bulk to profitability in the first half of FY2025, which saw an 18 per cent increase in revenue year-on-year, rising to $259.9m.

Bega Cheese Limited executive chairman Barry Irvin said innovation, cost savings and a focus on high-value categories were behind its branded business’s growth alongside a recovery in its bulk business division.

Bega Group executive chairman Barry Irvin. Picture: (Glenn Hunt/The Australian).

“Bulk segment statutory EBITDA was a profit of $24.4m compared to a statutory EBITDA loss of $5.6m in the prior year as the misalignment between global dairy commodities and Australian farmgate milk experienced in the prior year moderated,” Mr Irivin said.

“Bulk segment earnings are majority 1HFY2025 weighted as roughly two thirds of milk intake occurs in the seasonally stronger first half.

“The group reaffirms it’s of a normalised EBITDA of $190 to $200m in FY2025. The group expects to be at the upper end of this range.”

In December last year, Bega raised its farmgate milk price to average milk solids price range from $8.05 to $8.35 per kg, about an 1.8 per cent increase on its opening average milk solids price range of $7.90 to $8.20 this season.

Profitability in Bega’s branded segment also increased year-on-year with normalised EBITDA of $104.2m, higher than the prior year by 8 per cent.

Across the first half of 2024-15, Bega’s revenue reached $1.8bn, an increase of 3 per cent on the prior year.