AUS: Bega Cheese "positioned well" for M&A
Bega lost out to higher bid from Saputo for WCB
Bega Cheese, which lost out in its attempt to buy fellow Australian dairy processor Warrnambool Cheese and Butter Factory, has insisted it is "positioned well" to take part in the future consolidation of the sector.
Bega was beaten to WCB by Canada's Saputo despite arguing the company should remain Australian-owned.
Reporting Bega's half-year results last week, executive chairman Barry Irvin said the company still believed consolidation in Australia's dairy sector would benefit the industry - and claimed it had the resources to potentiall take part.
"The board continues to hold the view that further consolidation of the Australian dairy industry will create greater value across the supply chain and Bega Cheese has the balance sheet strength, business profile and performance that positions it well to pursue that value creation," Irvin said.
Bega dropped out of the race for WCB after being trumped by higher offers from Saputo and a third Australian dairy processor Murray Goulburn.
The company was already a shareholder in WCB and sold its shares to Saputo. Bega received A$99m for its 18% stake in WCB.
Irvin's comments came as he announced higher half-year sales and profits.
Bega's profit after tax for the year to 29 December was up 18% at A$18.7m (US$16.9m). EBITDA grew 10% to A$40.8m. The company said an "emphasis on cost control and efficiency", including lower distribution costs, helped its profits. It also said some direct costs fell amid a fall in production volumes.
The group said its revenue increased 4% to A$511m amid a rise in the value of dairy commodities. Bega said sales volumes were lower but a change in its product mix helped turnover.
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