Farmer-controlled dairy company Bega Cheese has defied tough export markets and competitive domestic milk supply conditions to lift its after-tax profit 132 per cent to $28.8 million.
Revenue jumped 7.5pc to $1.2 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) grew 56pc to $65.4m.
Bega produced 238,000 tonnes of dairy products in 2015-16, up 6pc on the previous year.
Executive chairman Barry Irvin has also flagged the company is maintaining a strong balance sheet and well positioned to grow organically, and through possible acquisitions.
Bega’s strong result came despite what Mr Irvin described as challenging circumstances turing tumultuous for many in the the Australian industry when global glut forced farmgate prices to be cut retrospectively by Bega rival’s Murray Goulburn and Fonterra Australia.
“Significant increases in global dairy production, a softening in demand in China, import sanctions in Russia and a highly competitive Australian market created very challenging operating environment for dairy companies and dairy farmers,” he said.
“Bega’s strategy of consistent and controlled investment in infrastructure and capacity demonstrated the stability of our business and our ability to respond to volatile 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.”
He expected continued revenue growth and improved financial performance in the current trading year.
However Bega’s chief executive officer Aidan Coleman has announced he will step down in January.
“Aidan has done a wonderful job as CEO of Bega Cheese over the past five years,” said Mr Irvin, who noted the company was well advanced in a recruiting a replacement “to ensure the transition to new leadership is seamless”.
