The Adelaide-based company said in a statement to the ASX this morning that it had secured an agreement with more than 20 SA dairy farmers for a total of 60 million litres.
Beston will source 20 million litres a year from its own farms and is now in talks with other SA dairies to secure the remaining 10 million litres to meet its 90 million litre target.
“All of the dairies involved have been supplying other national dairy food groups and were looking for alternatives,” Beston chief executive Sean Ebert said.
Last month, Beston commenced production of Parmesan cheese at its Murray Bridge facility. It plans to ramp up to full production towards the end of this year.
At the company’s Jervois factory, a state-of-the-art Mozzarella plant is currently being installed. Expected to be operational later this year, it will increase annual production capacity to 14,500 tonnes.
In a separate announcement, Beston provided an update of its overall operations ahead of the release of it FY17 results.
It said earnings had lifted significantly in the second half and would likely see sales revenue jump by up to 30 per cent from the first half. It also expects net profit after tax to increase by a similar amount.
But Beston warned that this “enhanced performance” would not offset first-half losses, which was, in part, attributed to a shortfall in China sales.
“The company will therefore incur an overall loss for the full year, and consequently not be in a position to pay a dividend,” it said.
Beston’s multi-million deal with Chinese retail giant Dashang Group has not come to fruition. It conceded that no orders were likely in “the near future, for reasons which are internal to Dashang”.
Beston shares were 2.4 per cent higher at 21.5 cents at 2.40pm ACST — around half the price the company was trading at 12 months ago.
By: Luke Griffiths
Source: The Advertiser
Link: http://www.adelaidenow.com.au/business/local-milk-matters-for-beston-global-food-as-the-adelaidebased-company-concedes-it-will-incur-a-loss-this-financial-year/news-story/b4a8396244978600b5cbae6e6d7298a4
