Bega Cheese says it is well placed to meet demand for its products from Asia and the Middle East after increasing profit, revenue and production in its first half.
The dairy co-operative on Thursday reported at 13.6 per cent increase in net profit to $15.9 million for the six months to December 30 from the previous corresponding period.
Sales revenue was $491.3 million, up 9.6 per cent from the previous first half in 2011.
"We've often talked about the stability and the strength of the Bega Cheese business even in times of difficult and highly competitive marketplaces," executive chairman Barry Irvin said.
"That has been very much proven in the first six months of this year."
Mr Irvin said Bega Cheese was well placed to take advantage of strong emerging food service opportunities in Asia, the Middle East and Oceania.
"We are seeing significant global growth and indeed we are seeing a continued pleasing trend of people being lifted out of poverty, GDP growing, and greater disposable income seeing greater demand for protein in particular but food in general.
"Australia is very well positioned to play a key part in that."
Mr Irvin attributed the most recent profit and revenue growth to the company's five-year contract as the exclusive supplier of Coles-branded cheddar cheese and mozzarella cheese in Australia, along with a completed cream cheese upgrade at subsidiary Tatura Milk Industries.
Capacity there increased from 15,000 to 22,000 tonnes, while total production across the business increased to almost 110,000 tonnes.
Bega Cheese increased direct-milk intake from farmers by almost 9 per cent, to 375 million litres, during a difficult time for production, Mr Irvin said.
"There were good conditions in the first part of this financial year, although December and January did become very dry on farm," he said.
"Farmers have been managing lower farm gate returns at higher costs, driven in particular by the difficult global commodities market and the strong Australian dollar."
Improvements in that area might result in improved pricing, although that wouldn't flow through until mid-year, he said.
A fully franked interim dividend of 3.5 cents would be paid, up from three cents last year.