Bega Cheese’s profits slumped 68% in the first half to $6.054 million on falls in global prices for dairy products.
Revenue increased 8% increase to $552.5 million but global dairy commodity price falls of 50% impacted Bega Cheese’s wholly owned subsidiary Tatura Milk Industries.
Costs of the new infant formula blending and canning plant at Derrimut in Victoria also impacted first half results.
The company cuts its profit forecast for 2015 to a range between $25 and $28 million. Previously the company said the 12 months would be in line with 2014’s $29.7 million.
Bega says the outlook for dairy commodities continues to be positive in the long term due to the global demand for dairy.
“Although there are positive signs of improved prices for global dairy commodities and improved currency relativity, in the short term, downward pressures will continue to impact commodity sales and margins, ” the company says.
The directors declared an interim fully franked dividend of 4 cents.
Bega Cheese shares are down almost 5% to $4.97.