Bega’s profit for the six months to December 25 was $15.7 million.
Excluding a $7.1 million inventory impairment related to its Bemore partnership — a 50/50 joint-venture with Blackmores to sell infant formula to China and Australia — Bega’s profit was up 39 per cent to $20.7 million.
“I am very pleased to present a strong first-half performance, particularly in the context of the recent upheaval in the Australian dairy industry, a highly competitive retail environment and significant disruption in infant formula supply channels into China,” executive chairman Barry Irvin said.
Bega said the long-term downward trend in global dairy commodity prices was showing strong signs of correcting, but the infant formula market had become more volatile.
Mr Irvin said that though the first-half result was strong, he expects the second half to be more challenging.
He reconfirmed the outlook provided at the company’s annual general meeting that earnings for the 2017 full-year will be broadly in line with 2016 before the impact of provisions.
Shares in Bega were 9 cents higher $5.49 at 10.57am AEDT.
IMPROVED DAIRY PRICES
* First-half net profit up 8.2pc to $15.7m
* Revenue up 10.6pc to $621.1m
* Interim dividend up 0.5 cents to 5.0 cents, fully franked