The Bega Cheese Ltd (ASX: BGA) share price is shooting up this morning following the release of the company's financial results for the year ended 30 June 2022.
Bega Cheese shares are trading 6.55% higher at $3.99 apiece at the time of writing.
Bega Cheese earnings slide in FY22
Key takeouts from the company's results include:
- Group revenue of more than$3 billion, up 45% year on year
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $149 million, down 19%
- Profit after tax of $24.2 million, a 69% decrease from FY21's result of $78 million
- Net operating cash flow of $158 million, reduced debt by $60 million
- Earnings per share (EPS) of 8 cents, down from 29.5 cents the year prior
- Declared final dividend of 5.5 cents per share, total dividend to 11 cents per share
What else happened this period for Bega Cheese?
Bega notes that the first full year of ownership of Bega Dairy and Drinks is reflected in the growth of the wider Group, with revenue growth of 63% to $2.5 billion.
Amid challenging conditions, brought on by supply chain bottlenecks and other disruptions from COVID-19, profit after tax declined by almost 70% year on year.
Despite this, the company still managed to declare a total dividend of 11 cents per share in FY22, and also managed to pay down $60 million in debt.
As a result, Bega's leverage ratio narrowed by 22% from 2.3x to 1.8x, bringing the net debt total to $265 million.
Management commentary
Speaking on the announcement, CEO Paul van Heerwaarden said:
The benefit of increased consumer prices has started to flow through in FY23 across all channels and product categories with the full impact to be felt in FY24.
We are pleased to end FY22 in a position of balance sheet strength which enables us to continue to support further growth, invest in brands, innovation, capital projects and importantly, our people.
What's next for Bega?
The company projects normalised EBITDA to be in the range of $160 million to $190 million for FY23.
It also said that competition for milk during June and July "resulted in further increases to approximately 30% higher than FY2022 farm gate milk price".
This is coupled with a substantial increase in global dairy commodity pricing, the company says.
Bega Cheese share price snapshot
Despite today's gains, the Bega Cheese share price has fallen 27.6% over the last 12 months and almost 30% year to date.
Based on today's price, the company has a market capitalisation of $1.2 billion.
