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Bega cheese suffers a $40 million Covid hit

Manufacturing News

Bega Cheese is likely to suffer a $40 million hit this financial year from Covid-19 costs, Russia’s invasion of Ukraine and floods in Central Australia.

The diverse food producer told investors that though Covid impacts were now easing, lockdowns in Shanghai were disrupting product deliveries into China

The company forecast an EBITDA for the year of $175 to $190 million as a result.

In a market update for investors the Sydney company said it was continuing to manage a number of one-off costs in the year, following costs of more than $20 million impacted in the first half year.

“The business is now additionally managing the costs and supply chain disruption impact of flooding in recent weeks and months in Central Australia, Northern NSW and Queensland, including the suspension of rail services n these regions.

“There have been increases in input costs associated with the outbreak of war in the Ukraine and now also concern on the certainty of deliveries of products destined to the China market scheduled through the Port of Shanghai due to lockdowns in that city.”

However Bega said international dairy prices continued to strengthen, though decreases in Australian milk production hasd increased competition for milk. Farm gate milk prices had been increased.

The company is focused on site and supply chain efficiencies, capacity increases and product innovation in high growth categories.

Picture: Bega Cheese

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