KUALA LUMPUR: Guan Chong Bhd’s (GCB) forward sales for the financial year ending Dec 31, 2023 is near-full, indicating the demand for chocolate is still resilient, according to managing director and CEO Brandon Tay Hoe Lian.
“Our Germany subsidiary is also recording better earnings as energy prices in Europe are now at lower levels, putting less pressure on the operating cost,” he said in a statement.
“Besides that, GCB remains prudent in managing our financial cost, while still prioritising our growth plans. Therefore, we have recently issued the second tranche of our sukuk, bringing in additional cash to finance our working capital and capital expenditure.
“Moving forward, the group will remain focus on our core business in cocoa ingredient processing. At the same time, we are determined to optimise SCHOKINAG’s production according to market conditions, while we endeavour to achieve better industrial chocolate sales margin to
enhance our bottomline,” Tay said.
In the first quarter ended March 31 (1Q23), GCB’s net profit tumbled 55.4% to RM23.8mil from RM53.3mil due to lower margin of cocoa butter, and increased finance cost.
It reported earnings per share of 2.02 sen versus 5.05 sen previously.
Revenue, however, rose 11.3% to RM1.1bil against RM990.5mil last year due to improved selling prices for cocoa solid and industrial chocolate ingredients.
GCB said its Ivory Coast cocoa grinding facility recorded maiden operating profit of RM15.4mil on revenue of RM144.8mil in 1Q23.
With the new Ivory Coast cocoa grinding facility commissioned in 4Q22, GCB’s total annual grinding capacity has increased by 22% or 60,000 tonne to 337,000 tonne from 277,000 tonne, alongside grinding capacities in Malaysia, Indonesia and Germany.
“The maiden profit from Ivory Coast is only the beginning. Our establishment in the country is a linchpin to our growth plans of making GCB a truly international player, producing quality ingredients to serve the world’s foremost chocolate market.
“The ample bean supply in Ivory Coast will not be a hindrance for our capacity expansion should we need to step up even further,” Tay said.
He said GCB would initially allocate 40% of grinding capacity from the Ivory Coast plant to supply cocoa ingredients to its German industrial chocolate subsidiary, SCHOKINAG-Schokolade-Industrie GmbH (SCHOKINAG), to produce premium quality chocolate ingredients to meet the demand of the European market.