Bega Cheese (ASX:BGA) expects a $40m hit from Covid-19

Bega Cheese (ASX:BGA) said it expects full year direct costs related to Covid-19 to be at least $40 million, despite restrictions easing during the March quarter.

The Aussie food brand also said they are now managing costs and supply chain impacts from the recent flooding in Central Australia, Northern NSW and Queensland, including the suspension of rail services into these regions.

On top of this, there have been increases in input costs associated with the outbreak of war in Ukraine, as well as harsh lockdowns in Shanghai, China creating uncertainty on deliveries to the broader China market, because many of those deliveries go through the port of Shanghai.

Bega said they are benefiting from international dairy prices. The improvement in international commodity markets and decreases in second half national milk production have further increased competition for milk with the majority of dairy companies including Bega Cheese increasing farm gate milk prices.

The company is forecasting a normalised EBITDA of $175 to $190 million.

Shares in Bega Cheese (ASX:BGA) are trading 1.3 per cent higher at $5.20.