KUALA LUMPUR: Guan Chong Bhd
(GCB) has been facing increasing difficulties in filling its enlarged production capacity due to the ongoing short supply of beans, which has limited its profit potential.
Managing director and CEO Brandon Tay Hoe Lian said that persistently high bean prices continue to exert significant pressure across the industry.
“On a positive note, chocolate demand remains strong, and we have already begun securing orders to be delivered next year. Looking ahead, we aim to explore opportunities or other avenues to ensure a steady supply of beans, enabling us to meet the resilient demand effectively,” he said in a statement.
GCB noted that the cocoa industry has been facing hurdles, as the bean supply from Ghana and Ivory Coast, which account for approximately 60% of global cocoa bean production, is experiencing disruptions due to adverse weather conditions and the swollen shoot virus. These issues have also negatively impacted global grinding activities.
In the third quarter ended Sept 30, GCB recorded a net profit of RM57.2mil, increasing 68.7% from RM33.9mil in the previous corresponding quarter on higher sales volume.
It recorded revenue of RM2.98bil, up 131.5% from RM1.29bil a year prior, mainly due to higher selling prices and sales volume of cocoa ingredients, particularly cocoa powder.
In the first nine months to Sept 30 (9M24), GCB’s net profit more than doubled to RM216.2mil from RM85.8mil on better grinding margin.
Revenue jumped 99.2% to RM7.07bil against RM3.55bil in the same period last year, driven by higher selling prices of cocoa ingredients and industrial chocolate in line with higher cocoa bean prices.
“While this year will remain a profitable year for the group, the challenges remain especially bean shortage and working capital needs. Going forward, we will continue to monitor our balance sheet closely and find ways to mitigate any liquidity risks,” Tay said.
GCB has declared a first interim single-tier dividend of 1.0 sen per share for the financial year ending Dec 31, 2024. The ex-date for the dividend is Dec 12, 2024, with the payment date payable on Dec 27, 2024.
The dividend payout totals RM11.7mil, representing 5.4% of the group’s net profit for 9M24.
