PETALING JAYA: Cocoa grinder Guan Chong Bhd’s net profit decreased 10.74% to RM30.76 million for the third quarter ended Sept 30, 2022 (Q3’22) compared with RM34.46 million in its corresponding quarter last year, due to rising interest rates and a weaker ringgit.
Meanwhile, revenue rose 10.26% to RM1.1 billion compared with RM998.1 million in the same quarter in the previous year, which is attributed to higher average selling prices of cocoa power and increased sales tonnage of 5.2% year-on-year.
For the nine-month period, net profit grew 22.81% to RM128.64 million from RM104.74 million for the same period last year.
Revenue increased 16.02% to RM3.29 billion compared with RM2.83 billion for the corresponding period in the prior year, backed by an 11.7% increase in cumulative sales tonnage year-on-year.
Managing director and CEO Brandon Tay Hoe Lian said the group’s operations faced rapidly changing market dynamics, such as increasing interest rates and rising energy costs in Europe.
“Despite that, we maintained profitability so far for the year. We are circumspect of the challenges, and we will continue to focus on operations efficiency to sustain our profit margins.
“In the meantime, we aim to secure more forward sales for our anticipated Ivory Coast facility and other plants in Malaysia and Indonesia,” he said in a statement today.
On prospects, Guan Chong said energy cost in Q4’22 is on a declining trend in the Western countries, especially in Germany. Besides that, global freight rates have eased and are close to normalising. Chocolate consumption remains positive despite the current high inflationary environment and chocolate demand is expected to maintain stable growth.
“We remain optimistic of our prospects as on top of the above indications, we continued to book in increasing forward sales of cocoa ingredients for next year. In addition, our Ivory Coast factory has started commissioning and is expected to run smoothly next year, anticipating additional contribution to our profit in FY’23.”
The group said that for Q3’22, the rising greenback resulted in an unrealised foreign exchange loss of RM17.1 million as a result of the group’s borrowings in US currency being marked to the market.
Higher energy costs at the group’s industrial chocolate plant in Germany also affected its overall profitability.