He noted that milk supply was down while milk prices were up, COVID-19 had inflicted costs of more than $40 million in 2022 and transport of goods was affected by flooding.
The company generated revenue of about $3 billion and recorded earnings before interest and tax of $149 million.
Bega said it expected the normalised earnings for 2023 to be in the range of $160 million to $190 million.
The company also expects Victorian farm gate milk prices to increase in the range of 15 per cent to 20 per cent above the 2022 financial year prices.
Chief executive officer Paul van Heerwaarden said strong competition for milk through June and July resulted in further increase in pricing, which were 30 per cent higher than the closing 2022 financial year farm gate milk price.
“Coupled with other cost increases, for example, oil, resin, packaging, coffee and sugar, we have seen a significant year-on-year increase in costs that will be partly offset by accelerating some of our cost out and efficiency programs and increased returns from international dairy commodities,” Mr van Heerwaarden said.
He mentioned the impact of the floods in northern Victoria and NSW.
“While we have had both staff members and farmers directly impacted by the floods, I am pleased to say they are all safe, and from a business perspective our processing facility at Tatura has been able to manage the impacts of multiple day power outages and the logistics challenge of collecting milk off-farm and having it processed.
“I would not only like to acknowledge our team but the teams at Fonterra and Saputo who have assisted us in managing our milk supply in circumstances where we were unable to process it with our own infrastructure.”
He did not expect the impact from the floods to have a material financial impact on their business performance in 2023.
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