Bega Cheese’s $83.7M Restructuring Costs Cast Shadow Over FY2025 Results
Bega Cheese Limited reported a mixed FY2025 with statutory revenue edging up to $3.54 billion but a statutory loss after tax of $8.5 million, offset by a strong normalised profit and a 50% dividend increase. The company is advancing manufacturing rationalisation and sustainability initiatives while expanding internationally.
- Statutory revenue up 0.5% to $3.54 billion
- Statutory loss after tax of $8.5 million due to restructuring costs
- Normalised profit after tax rises 74% to $50.8 million
- Manufacturing footprint rationalisation and automation investments underway
- Dividend increased 50% to 12 cents per share, DRP activated
Financial Performance Highlights
Bega Cheese Limited’s FY2025 results reveal a company in transition. Statutory revenue modestly increased by 0.5% to $3.54 billion, reflecting resilience in a challenging consumer environment. However, the Group reported a statutory loss after tax of $8.5 million, primarily driven by one-off costs related to a significant manufacturing footprint rationalisation program. Despite this, the normalised profit after tax surged 74% to $50.8 million, supported by a 23% rise in normalised EBITDA to $202 million.
Strategic Manufacturing Rationalisation and Capital Investment
The company is actively reshaping its manufacturing network to improve efficiency and reduce costs. Key initiatives include the sale of the Leeton juice extraction facility, consolidation of the Strathmerton cheese processing operations into the Ridge Street Bega site, and the planned phased closure of the Peanut Company of Australia’s Kingaroy and Tolga facilities. These moves are expected to deliver $30 million in annualised cost savings from FY2027 onwards. Capital expenditure reached $94.4 million, focusing on automation, most notably at the Laverton national distribution centre, and capacity expansions in yoghurt and cheese production.
Innovation and Market Growth
Bega Cheese continues to invest in innovation, particularly in high-protein and health-oriented products, responding to evolving consumer preferences. Protein-enhanced beverages like Dare Protein and Dairy Farmers Protein Smoothies have gained market leadership, while new product launches in yoghurt and spreads categories have supported branded segment growth. The Group also expanded its foodservice channel presence and international footprint, especially in Southeast Asia, where Farmers Union yoghurt maintains strong market positions.
Sustainability and Governance Progress
The Group advanced its Better Future sustainability strategy, emphasizing circularity, community, and collaboration. Climate risk assessments were completed in preparation for mandatory disclosures, and energy efficiency projects are underway. Safety performance improved significantly, with a 30% reduction in total recordable incidents. The Board approved remuneration outcomes aligned with business performance, including partial vesting of long-term incentives for executives, reflecting the Group’s improved financial results.
Balance Sheet and Dividend
Bega Cheese strengthened its balance sheet, reducing net debt by 22% to $126.1 million and lowering its leverage ratio to 0.8 times. The company declared a fully franked final dividend of 6.0 cents per share, bringing total dividends for FY2025 to 12 cents per share, a 50% increase from the prior year. The Dividend Reinvestment Plan (DRP) was activated, offering shareholders a cost-effective way to increase their holdings.
Bottom Line?
Bega Cheese’s FY2025 results underscore a pivotal phase of transformation, balancing short-term restructuring costs with long-term growth and sustainability ambitions.
Questions in the middle?
- How will rising farm gate milk prices in FY2026 impact Bega Cheese’s Bulk segment profitability?
- What is the expected timeline and financial impact of the Peanut Company of Australia’s phased closure?
- How will international expansion, particularly in Southeast Asia, contribute to revenue growth over the next five years?
