Bega Cheese delivered shareholders a 154-per-cent boost in profit in the December half year after improving its product mix and continuing to transform the company.
EBITA grew from $26.5 million to $65.8 million on sales down 4.5 per cent to $708 million and post-tax profit from $13.2 million to $21.7 million. After adjusting the EBITA for costs associated with the Lion Dairy and Drinks acquisition and legal costs relating to ongoing litigation with Fonterra and Kraft Heinz, the result was $73 million, 51-per-cent higher than during the same period a year earlier.
The company said sales were impacted by decreased milk volumes due to ongoing competition, a reduction in global commodity prices and the strong Australian dollar, among other factors.
The company also cited an ongoing review of its business process by the Boston Consulting Group completed last fiscal year and fully implemented during the first half. That resulted in some redundancies and led to a reduction in non-manufacturing overheads, positioning Bega’s cost base as globally competitive.
While the company continues to build both its local and international branded business in high-value nutritional powders and lactoferrin sales, there were improvements in its consumer business as well.
In spreads, Bega boosted its value share by 13.6 per cent to 30.9 per cent of the market, with the Simply Nuts brand doubling its slice of the natural peanut butter segment. Vegemite boosted its share of the yeast spread category, thanks to strong local consumption and the launch of Vegemite Squeezy in November.