Bega Cheese shares have soared by 12 per cent after the company revealed a "milestone" revenue jump and a positive outlook for the coming year, despite a 69 per cent drop in statutory profits.
The company said 2022 had had its challenges, with flooding in vast parts of the east coast and COVID continuing to disrupt the supply chain.
The disruption from COVID-19 has cost the company $40 million.
It is also the first year of operation for the business since acquiring Lion Dairy and Drinks.
Executive Chairman Barry Irvin said he was pleased with the result amid volatile market conditions.
"It’s the first time the company has exceeded $3 billion in revenue, which is obviously a milestone for the organisation and a testimony to the growth and acquisitions that the company have made over the past decade,” Mr Irvin said.
"It's a pleasing result which comes in what has been one of the most volatile periods I think in recent history."
COVID impacts continue
Chief financial officer Peter Findlay outlined $40 million in costs the company associated with COVID-19 supply chain disruptions.
"As the Omnicom virus spread, absenteeism sort of peaked at around 30 per cent, which puts huge pressure on our factories," he said.
"It predominantly cost our branded business about $6 million and we had additional RAT testing of close to $3 million.
"We had shutdowns in that plant with about $7.5 to $8 million where we just couldn't open plants and actually had to stop [product] lines."
The company recorded an EBITDA of $149.9 million and $24.2 million statutory profit after tax, down 69 per cent on last year.
Outlook positive as food prices rise
Bega Cheese chief executive Paul Van Heerwaarden said the end of $1 per litre milk had seen value return to the supermarket dairy cabinet.
"It's a cumulative 40 per cent increase in private label milk prices since we acquired the Lion Dairy and Drinks business in January last year," he said.
"And I would say that this is a really important development that we've seen since the acquisition, which really does position us well.
"The benefit of increased consumer prices has started to flow through in FY2023 across all channels and product categories."
The company confirmed an earnings guidance for FY23 in the range of $160-$180 million with strong international commodity prices supporting a higher farm gate milk prices.
Mr Irvin also revealed Bega Cheese Limited would undertake a corporate rebranding as Bega Group to reflect its acquisition of branded food and drink businesses.
