Bega Cheese gains after swinging to profit
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The news: Bega Cheese was the best performing ASX 200 stock in morning trade after the dairy producer swung to a statutory profit in the 2024 financial year.
The numbers: Bega shares had climbed 6.6% to $4.54 by midday AEST, having added nearly 50% over the last 12 months.
The company reported statutory profit after tax of $30.5 million, up from a $229.9 million statutory loss in FY23. Excluding non-recurring items, NPAT of $29.2 million was just below consensus estimates of $30 million, according to Visible Alpha (VA) data.
Normalised EBITDA grew 2% to $164.1 million, around the midpoint of guidance of between $160 million to $170 million, beating average forecasts of $162 million.
Bega said it expects normalised EBITDA of between $190 million and $200 million in FY25, compared with consensus expectations of $193 million.
The company declared a dividend of 4 cents per share, taking total dividends to 8 cents per share, up from 7.5 cents per share a year earlier.
The context: Bega said it expects to see continued growth in its branded segment and a "significantly improved" performance in its bulk segment as the disconnect between Australian farm gate milk prices and dairy commodity returns eases.
The company noted that its continued focus on cash optimisation — realising the benefits of corporate restructuring and other cost-saving initiatives — is expected to offset inflationary impacts and further improve profitability and leverage in FY25.
What they said: "[Bega] reported a good FY24 result which was slightly ahead of expectations, and pleasingly net debt was below our expectations," E&P retail analyst Phillip Kimber said.
"EBITDA guidance is consistent with VA consensus forecasts, however share price performance post locking in lower milk prices for FY25 suggests investor expectations skewed towards higher EBITDA expectations for FY25," he said.
The sources: ASX announcement, E&P Capital research
