Bega Cheese Limited reported a strong half-year performance with a 5% revenue increase and a 55% jump in net profit, alongside a higher interim dividend and ongoing operational consolidation.
- Revenue up 5.0% to $1.87 billion in H1 FY2026
- Net profit after tax rises 55.3% to $46.9 million
- Interim dividend increased to 7.0 cents per share, fully franked
- Manufacturing footprint rationalisation underway, including Strathmerton consolidation and peanut business exit
- Net debt climbs to $219.8 million following $40.4 million capital expenditure
Robust Revenue and Profit Growth
Bega Cheese Limited has delivered a solid first half for the 2026 financial year, with revenue climbing 5% to $1.87 billion and net profit after tax surging 55% to $46.9 million. This performance reflects both strong operational execution and favourable market conditions in the dairy sector.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 14.1% to $124.7 million, with normalised EBITDA up an even more impressive 20.9%, signalling underlying business strength beyond one-off costs.
Strategic Manufacturing Footprint Rationalisation
Bega Cheese is actively reshaping its manufacturing footprint to enhance efficiency and reduce costs. The consolidation of its Strathmerton operations into the Ridge Street site in Bega is progressing, with closure expected by mid-2026. Additionally, the company has exited its peanut processing business, selling related assets and leasing back facilities temporarily to ensure operational continuity during transition.
These initiatives incurred $9.4 million in normalised costs during the half, including staff retraining, inventory obsolescence, and restructuring expenses. While these costs weigh on short-term earnings, they are positioned to deliver long-term benefits through streamlined operations.
Capital Investment and Debt Refinancing
Capital expenditure increased to $40.4 million, focused on expanding yoghurt production capacity in Morwell, Victoria, automating the national distribution centre in Laverton, and upgrading safety and equipment across sites. This investment supports Bega’s growth ambitions and operational resilience.
Net debt rose to $219.8 million, up from $126.1 million at June 2025, reflecting these capital outlays and working capital increases. However, the company successfully refinanced its debt facilities in January 2026, extending maturities to 2030 and 2031, which improves financial flexibility and reduces refinancing risk.
Shareholder Returns and Outlook
In recognition of improved earnings, Bega Cheese declared a fully franked interim dividend of 7.0 cents per share, up from 6.0 cents in the prior period. The company also activated its Dividend Reinvestment Plan, offering shareholders a cost-effective way to increase their holdings.
While the half-year results are encouraging, the company notes seasonal factors and ongoing restructuring costs may influence future performance. Investors will be watching closely how the operational changes translate into sustained margin improvements and cash flow generation.
Bottom Line?
Bega Cheese’s strong profit growth and strategic investments set the stage for a transformative year, but execution risks remain as restructuring continues.
Questions in the middle?
- How will the manufacturing footprint rationalisation impact margins and costs in the second half and beyond?
- What are the expected benefits and timelines for the automation project at the Laverton distribution centre?
- How will rising net debt and capital expenditure affect Bega Cheese’s financial flexibility going forward?