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Bega Cheese shares plummet as COVID-19 impact prompts profit warning

23 December 2021

Shares in the Australian company dropped by as much as 9.3%

Shares of Bega Cheese tumbled to a four-month low on Thursday after the company warned of a hit to its 2022 fiscal earnings from strong competition for dairy supply in Australia, high global prices and impact from the coronavirus, reported Reuters.

The warning sent the cheesemaker's shares down as much as 9.3% to A$5.10 in their worst intraday session since March 2020.

The company expects FY2022 normalised EBITDA to come in a range of A$195 million to A$215 million ($140.67 million-$155.10 million), lower than Refinitiv's consensus estimate of A$221.8 million.

Bega said the COVID-19 impact has been "extensive and significant", ranging from market disruption in Australian food service channels as a result of lockdowns to major cost increases and shortages across the entire supply chain.

Farm milk supply across the Australian dairy industry remains flat to lower despite positive seasonal conditions, with strong competition for supply continuing, the company said.

"Expect upward pressure on farm gate milk prices to remain for the balance of the year," Bega said in a statement.

 

Source: Reuters



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