Share price falls after Bega Cheese announces low after-tax profit

SHARES in Bega Cheese have fallen 14 per cent after the company announced lower-than-expected profits for 2018-19.
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The dairy company announced it expected its normalised after-tax profit for the current season to be between $44 million and $48 million.
Bega Cheese reported a normalised profit of $44 million for 2017-18 after making adjustments for the acquisition of the Peanut Company of Australia and the former Murray Goulburn Koroit factory.
But with almost a full year of earnings from PCA and the Koroit factory, the share market expected proportionately higher earnings and profits.
Bega Cheese said the dairy industry was expecting milk supply to be more than 5 per cent lower than the previous season.
“The overall reduction in the Australian milk supply pool has created significant competitive farm gate milk pricing pressure,” the company said.
“The outlook for Bega Cheese’s financial performance in FY2019 is expected to be impacted by this competitive pressure.”
Bega Cheese said its overall milk intake this year would be 1-1.1 billion litres, compared to 750 million litres in 2017-18.

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