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Sammieboy

129 Posts.

40

07/12/21

14:01

Post #: 58130366
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Originally posted by schura: ↑

Sammieboy - In my estimation, the key metric on the slide you show "FY22 Outlook" is the revenue/litre of milk - increasing from .77c to 1.05-1.17. That's increasing as lactoferrin, whey etc kick in production and sales.

I really don't think the statement "Mozzarella and Cheddar cheese contribute nil profits" can stand up to scrutiny. I would agree with your statement if all the by-product of Mozzarella (pre and post production) were flushed down the loo! They are not. Key to understanding BFC business is not comparing single product profitability against the cost of a litre of milk. It's the basket of goods produced from every litre of milk that counts. Every litre of milk that produces Mozzarella also produces lactoferrin and whey powder.

That is why the key metric is revenue/litre of milk. A 44% increase of that figure indicates that the business is coming together (at last) and assuming economies of scale I would expect this to flow into substantial EBITDA growth through FY22.

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Schura,

Good details and you could be right if BFC last long enough.

At 6.7c NAB must be asking questions.

Have a close look at Mozzarella (refer my prevoius posts NOTHING HAS CHANGED) - BFC milk cost is approx 55c litre. Approx 10000litres = 1000kgs Mozzarella. Milk in Mozzarella therefore is $5.50kg ADD Processing costs only say $0.50kg. Factory cost = $6kg. BFC looks to be selling Mozzarella at average around $5.50kg. BFC annual Mozzarella production at 150ml litres milk is approx 14m kgs. So loss V Factory cost = $0.50kg = $7m pa.
Some of the losss on Mozzarella will be offset against profits on Cream and Whey.
So BFC takes in milk to get lactoferrins but lactoferrin sales are not running to expected levels (think 20-24 tonnes pa ex various BFC documents). Effect is keep making lactoferrins and add to Stocks which in turn needs more Working Capital.

BFC looks to be a price taker in all products. Gone is the price maker (assume basis of the Sexton/Hicks Lactoferrins plan) role because competition is fierce in all markets where BFC competes.

BFC is fighting for survival yet from the AGM and recent Business Update I can find no reference to cost cutting.

Back to Church. All shareholders welcome

BFC Price at posting: 6.8¢ Sentiment: Sell Disclosure: Held
1 Upvote

1 Great analysis

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