Bega Cheese announced a normalised EBITDA of $74.6m for the half year to 25 December 2022, down 30% YOY. Group revenue jumped 11% to $1,675.1m with volume growth of 4% in its branded segment. The group expects price and product mix initiatives will offset cost inflation by the end of FY2023 and the full benefits of those increases realised in FY2024. Bega’s Bulk Dairy Ingredients business grew 2% due to higher commodity values. Commenting on milk supply in its update, Bega said the industry is experiencing significant headwinds, including low labour availability, extensive flooding in some regions and high land prices, which is expected to moderate in the second half of FY23 and FY24.
Investments of $22.1m are planned for 2023, including Bega branded cream cheese block and tub launch, infrastructure upgrades across sites and installation and commissioning of equipment to support sales in key growth segments.
Meanwhile, Bega confirmed it will close its manufacturing site in Canberra, switching production to its Penrith site in NSW. A lack of dairy farms near Canberra forced Bega to source milk from outside the ACT, transporting it to Griffith for production, often bypassing more efficient and sustainable production sites.