Bega Cheese sees 11% increase in revenue for FY2023’s first half

Image credit: Bega Cheese

Bega Cheese Limited generated a revenue of more than $1.6 billion in the first half of fiscal year 2023, which ended on 25 December 2022. The figure marks an 11 per cent increase compared to the prior year’s results. 

The increase in revenue includes a 4 per cent volume growth in Bega’s Branded segment, which reflects customer loyalty and continued strong demand for the brand’s portfolio, Bega Cheese said in an ASX announcement

The company’s statutory earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $71.6 million, a 26 per cent drop from the prior comparative period. 

The normalised EBITDA for the first half of 2023 was at $74.6 million and marked a 30 per cent decrease compared to the normalised comparative period. 

Normalised items in the current period largely include the expenses to complete the development of software-as-a-service applications that began in fiscal year 2022. 

Bega also detailed that the double-digit growth in the Branded segment of 13 per cent reflects significant price increases and volume growth. 

Revenue generated from the bulk dairy ingredients rose by 2 per cent due to high dairy commodity prices but was limited by lower milk availability. 

The company was also hit by significant inflationary cost pressure, including higher prices for farm gate milk reflecting strong global dairy commodity prices in calendar year 2022. 

Milk supply across Australia showed a significant 7 per cent drop in the first half of the fiscal year despite a historically strong farm gate price. 

The milk industry experienced low labour availability, extensive flooding in some regions, high land prices, and the attraction of high prices in other agricultural commodities, such as beef. 

The company said it expects some of these headwinds to wind down in the second half of the fiscal year and in FY 2024.