Australia's Bega Cheese has issued a profit warning on the back of a "weaker recovery in global dairy commodity prices".

In a stock exchange filing, the dairy manufacturer revised its forecast for normalised full-year earnings to A$21-24m (US$16.5m-18.9m), down from an earlier estimate of A$25-28m.

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The company said while it had seen some recovery in February/March, the expected continued improvement in pricing had not occurred and price improvement had not been maintained. Bega said its cheese business was "particularly impacted" by returns from skim milk powder with current pricing affecting both the value of sales and stock valuations.

In a separate announcement today (20 May) Bega said it had received an A$5m government grant to fund a dairy bio-nutrient extraction project to be installed at its manufacturing facility at Lagoon Street in Bega. Barry Irvin, executive chairman at Bega, said the initiative is "consistent with Bega Cheese's view that value and opportunity will be created through the manufacture of high-value products".

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