A WEAKER than expected recovery in the global dairy market has forced NSW South Coast-based Bega Cheese to shave about $4 million from its full-year earnings expectations for 2014-15.
Executive chairman, Barry Irvin said while there was some recovery in the market in February and March, the expected continued improvement in pricing had not occurred.
A review of Bega's expected profit after tax has been revised down from between $25m and $28m to between $21m and $24m.
Although the company was pleased with the second half performance of its consumer goods, food service and value added businesses, particularly infant formula and child nutritional products, returns from conventional skim milk powder sales had been hit hardest by the plateauing overseas price.
However Bega Cheese continued to have a positive outlook for the year ahead despite global commodity prices impacting on the 2014-15 trading year.
Mr Irvin said Bega expected strong growth in its nutritional, consumer goods and food services business.
A new nutritional powder canning and blending plant at Derimut in Melbourne's west was performing to expectations and had absorbed commissioning and start-up costs.
Production volumes had now built up to the point that a third shift had been introduced to keep the site working around the clock.
Andrew Marshall
National agribusiness writer for Fairfax Agricultural Media.
National agribusiness writer for Fairfax Agricultural Media.
