Shares in drought-hit Bega Cheese plummeted in early trade after the firm cut its interim payout despite a first-half profit boost.
The Vegemite owner announced profit of $8.55 million for the six months to December 29 – up 71 per cent from $4.99 million a year ago – with the uninterrupted contribution from its Koroit facility helping revenue increase 14 per cent to $741.2 million.
However, normalised profit fell by 21 per cent to $15 million as total production fell 10 per cent to 154,456 tonnes in the half.
The dairy goods manufacturer has issued two drought-related profit warnings so far this financial year as it pays a higher price to secure milk supply.
Bega also announced on Monday it would cut its fully franked interim dividend from 5.5 cents per share to 5.0 cents per share.
The firm’s share price immediately fell by more than 10 per cent after emerging from Thursday’s trading halt, necessitated by a data error that delayed the release of its first-half results last week.
Shares were still 3.21 per cent lower at $3.92 by 1404 AEDT amid a wider market downturn.
Bega’s underlying earnings for the half were hurt by reduced milk supply and margins in the dairy industry, particularly in Northern Victoria, while it also reported a softening in Chinese infant formula demand.
The company said the coronavirus outbreak had had little impact on its supply chain or customer shipments, though it was closely monitoring the situation.
Bega reaffirmed its downgraded full-year normalised earnings guidance of between $95 million and $105 million.
BEGA CUTS PAYOUT DESPITE FIRST-HALF PROFIT LIFT
* Statutory revenue up 14pct to $741.2m
* Statutory profit up 71pct to $8.55m
* Fully franked 5.0 cent interim dividend, down from 5.5 cents.