KUALA LUMPUR: Chocolate as an affordable luxury consumer product is generally considered recession-proof, but the rising inflation and interest rates in the global economy could soften demand for the confectionery, says Guan Chong Bhd.
The cocoa manufacturer said it is staying cautious given the high energy costs in the world's economy while the latest signs of recession could have a bearish effect on chocolate demand.
"We are adopting a cautious outlook on the future prospect and are more cautious on our investment and future plan.
"The group will place focus on expanding the market of high margin industrial chocolate and the optimisation of production according to the market conditions," it said on its future plans.
Guan Chong's guidance comes following a robust result in its second quarter report, which saw revenue jump over a third to RM1.2bil.
The group's net profit was consequently higher at RM44.61mil, 22.59% improved over RM36.39mil in the same quarter last year.
Earnings per share rose to 4.22 sen as compared with 3.51 sen in the comparative quarter.
According to the group's filing with Bursa Malaysia, the 36.67% increase in turnover was mainly owing to an increase in the sales volume of cocoa butter as the previously delayed shipments were shipped out during the quarter.
It added that improved selling price for cocoa solids also contributed to the higher revenue.
In light of the performance, the board of directors declared a second interim dividend of two sen per share, going ex on Sept 14, 2022, and payable on Oct 10, 2022.