Bega Cheese’s FY2016 results announcement has demonstrated the strength of its long term strategy, the experience and capability of the leadership team and the values and resilience of the company.
In a year of market oversupply and strong competitor activity Bega Cheese has grown revenue by 7.5% to $1.2 billion, increased EBITDA to $65.4 million and increased profit after tax by 132% to $28.8 million (normalised increased 33% to $29.2 million).
Significant increases in global dairy production, a softening in demand in China, sanctions in Russia and a highly competitive Australian market created a very challenging operating environment for dairy companies and dairy farmers. These challenging circumstances turned tumultuous when two large dairy companies announced retrospective price cuts to their dairy farmer suppliers.
Executive Chairman Barry Irvin commented, “Bega Cheese’s strategy of consistent and controlled investment in infrastructure and capacity is demonstrated in the stability of our business and our ability to respond to volatile market circumstances. It is a reflection of both our values and strategy that the company maintained its commitments to our dairy farmers while achieving strong revenue and profit growth”.
Bega Cheese produced 238,000 tonnes of dairy products in FY2016, a 6% increase on the previous year. The company continues to focus on its four business platforms of dairy ingredients, food service and consumer packaged goods, nutritionals and bionutrients.
Bega Cheese’s values and strategy have been very evident in FY2016 with the company maintaining its farm gate milk price, continuing its support and commitment to community organisation’s in the regions it operates in, recording a significant improvement in safety with a record low LTIFR of 4 and announcing an increase in full year dividend to shareholders to 9.5cps (4.5cps interim and 5.0cps final).
CEO Aidan Coleman was very pleased with the business performance in a challenging year. “I am delighted with the performance of the team. We achieved growth in our nutritionals platform and our international food service and consumer goods platform. Bega Cheese continued to invest in our business and our people while remaining focused on growth and financial performance during challenging market circumstances”.