Drought-hit Bega Cheese has cut its interim payout to shareholders despite lifting its fist-half profit by 71 per cent.
The Vegemite owner announced profit of $8.55 million for the six months to December 29 – up from $4.99 million a year ago – as the firm lifted revenue for the half 14 per cent to $741.2 million.
Bega said on Monday the coronavirus outbreak has so far had little impact on its supply chain and customer shipments, though Bega is closely monitoring the situation.
The company’s Bega Cheese segment was helped by increased output at its Koroit facility during the half, as well as the improvement in milk returns following last year’s closure of the Coburg plant, and new toll processing arrangements.
Bega’s underlying earnings were, however, hurt by reduced milk supply and margins in the dairy industry, particularly in Northern Victoria.
A softening in Chinese infant formula demand has also resulted in a reduction in volumes at the Tatura Milk segment, further reducing earnings in the half.
Statutory earnings slipped by 1.0 per cent to $39.3 million as the company announced a fully franked interim dividend 5.0 cents per share, down from 5.5 cents per share a year ago.
The dairy and grocery producer reaffirmed its downgraded full-year normalised earnings guidance of between $95 million and $105 million,
It had reduced its expectations in October because of lower demand for its unbranded products and higher milk prices amid unprecedented competition for drought-affected supply.
AAP
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