- Despite facing operational issues, Beston Global Food (BFC) reported a growth in sales and production for the first half of the 2021 financial year
- The company's Jervois dairy facility in South Australia suffered operational issues, which interrupted production and led to a statutory loss of $8.8 million
- After a week-long shutdown, sales and production spiked in the new year, which led BFC to maintain its operating guidance for FY21
- The company expects a year-on-year revenue increase of 33 per cent to between $130 million and $145 million
- It will also shortly commission its lactoferrin plant which is expanding production from three tonnes per annum to 25 tonnes per annum
- As a result, lactoferrin production is expected to rise by a significant 250 per cent
- BFC ended the day 4.55 per cent in the green with shares closing at 6.9 cents
Despite facing operational issues, Beston Global Food (BFC) saw a slight 3 per cent increase in gross revenue to $52.9 million for the first half of the 2021 financial year.
Beston Global Food is an award-winning company which aims to provide natural and verifiably safe food and beverages to global markets so that consumers can make healthy choices.
The company owns and operates the Jervois dairy facility in South Australia, where it produces various dairy products.
Unfortunately, the facility suffered operational issues between October and December, which forced the company to hold back on its earnings.
"The first half of the financial year was not without its challenges due to the
operational issues encountered at Jervois from October to December which caused the reported result to fall short of our targets," CEO Jonathan Hicks said.
While the issues were rectified over a one-week shut down period in December, the setbacks contributed to a half-year statutory loss of $8.8 million.
Positively, milk supply increased by 28 per cent on the prior corresponding period (pcp).
Mozzarella production also increased by 29 per cent to 5646 tonnes which aligns with a 26 per cent sales increase to 5401 tonnes.
Subsequent to the half-year period, BFC produced a record 1189 tonnes of mozzarella in January alone after a seasonally lower milk supply due to the dairy facility issues.
Lactoferrin production was fairly in line with the pcp — producing 640 kilograms.
Sales of products manufactured at Jervois increased 24 per cent, from $38.2 million to $47.5 million. Overall dairy sales increased 10 per cent, however sales of cheddar, produced at Murray Bridge, decreased from $6.9 million to $1.5 million.
Additionally, sales from meat operations dropped 20 per cent to $4.3 million, which is largely due to COVID-19 and its impact on the demand for burgers and other products supplied into fast food outlets.
Despite these setbacks, BFC progressed the expansion of its Jervois-based lactoferrin plant. The plant currently produces three tonnes per annum but will produce 25 tonnes per annum once it's been expanded.
The new plant is set to be commissioned in the coming weeks.
"With these operating problems behind us, and the commissioning of the new lactoferrin plant immediately in front of us, we are back on track and look forward to a much stronger 2H21 leading into FY22, which will benefit from a full year of significantly higher lactoferrin production," Jonathan said.
As a result of the strong performance in the last two months, the company has maintained its FY21 operating guidance.
BFC expects contracted milk supply to increase by around 25 per cent to between 131 and 145 megalitres, mozzarella production to increase 50 per cent to between 12,600 and 14,700 tonnes, and lactoferrin production to rise by a significant 250 per cent.
Lastly, it expects revenue to be between $130 million and $145 million — representing a 33 per cent increase on FY20.
BFC ended the day 4.55 per cent in the green with shares closing at 6.9 cents.