The company anticipates that the overall industry milk supply will be down by about five per cent this financial year, but it has announced that its milk intake is expected to rise to about 1billion litres this fnancial year compared to about 750million litres in the previous year.
‘‘The overall reduction in the Australian milk supply pool has created significant competitive farm gate milk pricing pressure,’’ a statement from Bega said.
‘‘The outlook for Bega Cheese’s financial performance in FY2019 is expected to be impacted by this competitive pressure.’’
The company is expecting a normalised earnings before income tax in the range of $123million to $130million for this year, compared to the past year’s performance of $109.6million.
Bega said the integration of the former Murray Goulburn Koroit factory and its milk acquisition program, particularly in the Western Region, had resulted in a seasonal build of inventory with associated funding costs.
The company also pointed to increased depreciation charges on the Koroit infrastructure.
Current forecasts indicate a normalised profit after tax range of $44million to $48million.
‘‘While the current decrease in milk supply in the Australian dairy industry is creating significant competitive pressure across our entire dairy business, we are very pleased with the integration of Koroit and the forecast performance of that acquisition,’’ Bega said.