By BERNAMA
Guan Chong Bhd (GCB), one of the largest cocoa processors in the world, posted a 79% drop in group net profit to RM7.4 million for the second quarter ended June 30, 2013 (2Q13) on the back of a 4.4% decrease in group revenue to RM299.1 million.
The underperformance was due mainly to the declining selling prices of cocoa powder as a result of weaker demand globally.
The lower profit for the quarter was also affected by the provision of inventory impairment amounting to RM14.7 million, the group said in a statement today.
However, selling prices and demand for GCB’s cocoa butter, the other main by-product of cocoa beans processing, sustained during these volatile times.
Managing director and chief executive officer Brandon Tay said this had resulted in a favourable sales mix for the group that still eked out some profits, even as most peers in the cocoa processing industry registered losses.
Brandon Tay
“Going forward for the rest of the year, we expect the cocoa grinding industry to be rather challenging, notwithstanding the uncertainty of the cocoa market consolidation alongside the weaker sentiments.
“Meantime, we will put in place measures for stringent cost controls, as well as increased efforts to identify new export markets for the group,” Tay said.
According to the International Cocoa Organisation, retail demand in emerging markets continued to be firm on the back of increasing cocoa butter prices as chocolate manufacturers rebuild stocks.
“The long-term prospects for cocoa ingredient remains bright as consumers will continue to consume chocolate and drink malt drinks. We believe our in-depth knowhow in the cocoa processing industry will sustain us in this challenging period”, Tay said.
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