KUALA LUMPUR, May 27 — Cocoa manufacturer Guan Chong Bhd’s net profit dipped 53 per cent to RM33.9 million in the first quarter ended March 31, 2021 (Q1 FY2021) from RM72.2 million in the same period last year due to narrowing margin but remain upbeat of industry picking up in the second half of 2021.
Revenue edged up 5.6 per cent to RM960.12 million compared to RM909.38 million previously.
“The weaker bottom line was due to higher freight costs and competitive margins as a result of lower combined ratios of cocoa ingredients, an indicative measure of selling prices over cocoa bean costs.
“The previous quarter also had a one-off gain on disposal of an associate company amounting to RM27.8 million,” it said in a statement today.
Nevertheless, the world’s fourth-largest cocoa grinder said it is staying on course for its expansionary plans in Ivory Coast, Germany and the United Kingdom.
It said the expansion plans entailed the company’s target of spending more than RM505.3 million on capital expenditure over the next few years to build the 60,000-tonne grinding facility in the Ivory Coast, acquire new machinery in Germany and equip a value-added melting and liquid industrial chocolate factory in the United Kingdom.
“The current situation in the cocoa industry is just an extended blip that has disrupted chocolate demand as borders around the world remain closed.
“We are optimistic of the long-term bright prospects of the demand for chocolate and will maintain committed to our two-pronged growth plans of being close to both the consuming market and the main source of cocoa beans,” managing director and chief executive officer Brandon Tay Hoe Lian said.
He said the completion of these facilities would prove to be timely to capitalise on the expected recovery of the demand for cocoa ingredients in the second half of 2021 as countries progressively increase the roll-out of vaccines to its populations and borders are expected to be open.
“All in all, we are confident that these ventures will help propel Guan Chong to the next growth plane and strengthen our foothold to become a global player in the cocoa supply chain,” he said.
On the recent movement control order 3.0 (MCO 3.0), he said the company’s operation is not significantly affected by the latest implementation of MCO 3.0 in Malaysia.
He said its grinding facilities in Pasir Gudang, Johor are still running at optimal levels of capacity as well as that in Batam, Indonesia.
“The sales orders for our cocoa ingredients remain intact and we have secured most of our sales for the financial year ending Dec 31, 2021,” Tay said.
Upon completion, the new grinding facility in the Ivory Coast would boost Guan Chong’s annual grinding capacity to 317,000 tonnes from 257,000 tonnes presently and support the company’s cocoa ingredient requirements in its Germany-based industrial chocolate operations SCHOKINAG as well as its sales growth in Europe.
Guan Chong also declared a first interim dividend of one sen per share in respect of FY2021 with ex-date on June 14, 2021 and payment date on July 9, 2021, bringing the total dividend payout for the first quarter to RM10.3 million or 30.5 per cent of net profit. — Bernama
