KUALA LUMPUR: Cocoa grinder Guan Chong Bhd said its annual earnings jumped to a record high, as a strong sales volume mitigated the impact of increased tax provision in the last quarter.
Net profit for the year ended Dec 31,2019 rose 15% to RM219.4mil compared with RM190.1mil made a year ago.
Revenue surged 29% to RM2.9bil.
“We expanded our grinding capacity in 2019 to supply increasing orders for cocoa ingredients, and expect the strong demand to continue in 2020, ” managing director and CEO Brandon Tay Hoe Lian said in a statement yesterday.
“Furthermore, we are currently undertaking our growth plans to be present in new markets internationally, ” he said.
Guan Chong, in December, said it has agreed to acquire industrial chocolate maker Schokinag in Germany.
The move, Tay said, complemented the group’s upcoming new cocoa grinding facility in Cote D’Ivoire in 2021, the world’s largest producer of cocoa beans and the primary source of cocoa beans for Europe.
Schokinag has an industrial chocolate plant with capacity of 90,000 tonnes, and a cocoa processing plant which can grind 7,000 tonnes of cocoa beans into cocoa mass per year.
The acquisition is expected to complete in the first quarter of 2020.
Additionally, the group’s upcoming new grinding facility in Cote D’Ivoire is in the midst of undergoing land preparatory works, following the announced €50-60mil capital expenditure over a one-and-a-half year period to 2021.
The new 60,000-tonne cocoa grinding facility, being part of the first phase of the group’s expansion programme in Cote D’Ivoire, is targeted to be commissioned in the first quarter of 2021.
Combined with the group’s existing facilities in Pasir Gudang, Johor and Batam, Indonesia, the group’s total grinding capacity will increase to 310,000 tonnes, from 250,000 tonnes currently.
For the fourth quarter Dec 31,2, Guan Chong’s revenue grew 20% to RM796mil, but net profit declined to RM44.7mil as a result of increased tax provision.
This was mainly from the utilisation of capital allowance for the capacity expansion investment in the GCB Cocoa Malaysia (formerly Koko Budi) plant.
Guan Chong has proposed a final dividend of 1 sen. Including the first, second and third interim dividends, total expected dividend payout for FY2019 would amount to RM34.6mil, or 15.8% of net profit.
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