Bega Cheese says costs directly related to Covid will exceed $40 million for FY22. In a trading update, Bega said it is expecting a normalised EBITDA of $175-$190 million.
In its 1H FY22 update, Bega said the impact of Covid would exceed $20 million, and while there had been some recovery in the market and easing of Covid-related costs, the full year EBIDTA impact would be double that.
The recent flooding events in Central Australia, Northern NSW, and Queensland, including rail services being cut added costs and further supply chain disruption, while the outbreak of war in Ukraine increased some input costs.
Ongoing lockdowns in China have meant there is a level of uncertainty about products destined for the mainland due to the port of Shanghai being impacted.
Earlier this week the Australian Food & Grocery Council CEO Tanya Barden said the food and beverage sector could no longer absorb the increased costs stemming from world events and subsequent inflationary pressure.
Bega said it expected the costs and market disruptions would be confined to FY22.
Meanwhile, international dairy prices continue to strengthen, it said, with international commodity markets improving and 2H FY22 seeing a decrease in national milk production increasing competition for milk.
