Bega Cheese meets guidance in ‘a year like no other’

Strong growth in exports and in its grocery business has enabled Bega Cheese to deliver a result at the top end of its earnings guidance for the 2019-20 financial year.

The dairy and food business was one of only a few ASX-listed companies not to ditch or lower its earnings guidance in the June half as the coronavirus pandemic swept across the world, hit economic activity and sent Australia towards recession.

ASX-listed dairy and food producer Bega Cheese has delivered a result at the top end of its earnings guidance.Credit:Justin McManus

Bega's full-year results released shortly before the market opened on Thursday revealed its normalised EBITDA (earnings before interest, tax, depreciation and amortisation) of $103 million was at the top end of its guidance released last year, of $95 million to $105 million.

Statutory profit after tax rose by a hefty 384 per cent for the year to $21.3 million. On a normalised basis, profit after tax was up by a more moderate 3 per cent, to $31.9 million, and comfortably ahead of $27.4 million Bloomberg consensus.

"It has been a year like no other, we began the year in the grips of drought which contributed to a very competitive milk procurement environment and then managed never before seen bushfires," Bega executive chairman Barry Irvin said.

"While still managing the impacts of those difficult circumstances COVID-19 was upon us, resulting in a major correction in global dairy commodity prices, a collapse in Australian and international food service demand and an increase in Australian retail demand," he said.

Bega Cheese.Credit:Steve Hynes

The company declared a fully franked final dividend of 5 cents per share, payable on October 7.

Bega's total revenue was down 5 per cent to $1.49 billion, which was below market consensus of $1.52 billion. Bega shares closed up 1.7 per cent at $4.86 on Wednesday, ahead of its results release.

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