Bega Cheese Limited Reports Strong FY2024 Results Despite Bulk Segment Challenges

Highlights:

• Branded Segment Growth: Bega Cheese Limited (ASX: BGA) saw a 48% increase in Branded segment EBITDA, contributing 86% of external revenue, offsetting Bulk segment challenges.
• Strong Financial Performance: The company reported a statutory EBITDA of AU$165.1 million (up 15%) and a net profit after tax of AU$30.5 million, reversing a AU$229.9 million loss from the prior year.
• Operational Efficiency: Bega Cheese reduced net debt by $41.2 million, achieving a year-end leverage ratio of 1.3x, and completed significant organisational realignment to support its five-year strategic plan.

Branded Segment Drives Growth

Bega Cheese Limited (ASX: BGA) has announced its FY2024 financial results, highlighting a notable recovery in its Branded segment. The company's revenue surpassed AU$3.5 billion, marking a 4% increase compared to the previous year. The Branded segment, which now contributes 86% of Bega’s external revenue, saw significant growth, offsetting the challenges faced in the Bulk commodities segment.

Key Financial Metrics

In FY2024, Bega Cheese reported a statutory EBITDA of $165.1 million, reflecting a 15% increase from the previous year. The company also posted a net profit after tax (PAT) of AU$30.5 million, a substantial improvement from the AU$229.9 million loss recorded in FY2023. The earnings per share (EPS) rose to 10.0 cents, a sharp contrast to the negative 75.6 cents in the prior year. Normalised EBITDA saw a modest increase of 2% to AU$164.1 million.

Operational Highlights

Bega Cheese's operational improvements were driven by cost efficiencies in manufacturing and supply chain processes, as well as the successful integration of acquisitions like Betta Milk and Meander Valley Dairy. The company also completed significant organisational realignment to support its five-year strategic plan. Additionally, Bega Cheese managed to reduce its net debt by AU$41.2 million, bringing it down to AU$162.4 million, with a year-end leverage ratio of 1.3x.

Outlook for FY2025

Looking ahead, Bega Cheese anticipates continued growth in its Branded segment and expects improved performance in the Bulk segment as market conditions stabilize. The company projects a normalised EBITDA range of AU$190 to AU$200 million for FY2025, supported by ongoing cash optimisation and cost-saving initiatives. Bega Cheese also announced a final fully franked dividend of 4.0 cents per share, bringing the total dividends for the year to 8.0 cents per share.

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