Guan Chong Bhd managing director and CEO Brandon Tay Hoe Lian
KUALA LUMPUR: Guan Chong Bhd
expects earnings in the second half of 2024 to exceed last year’s results, driven by higher selling prices for cocoa ingredients and industrial chocolate, along with steady delivery to clients.
“Although cocoa bean prices remain elevated, bean grinding in three major regions (Europe, Asia, and North America) recorded 2% growth to 673,251 metric tonnes in the second quarter of 2024. Similarly, our operations in Malaysia, Indonesia, and Ivory Coast are grinding more than last year, suggesting that global demand for chocolate remains strong.
“Building on this momentum, we expect earnings in the second half of 2024 to exceed last year’s performance, driven by higher selling prices of cocoa ingredients and industrial chocolate and sustained delivery to our clientele,” managing director and CEO Brandon Tay Hoe Lian said in a statement.
Looking ahead, he said Guan Chong remains cautious and manages its cash flow prudently to ensure sufficient working capital to sustain operations.
“While sourcing cocoa beans has become more challenging, we are managing our bean inventory efficiently to maintain high grinding levels to ensure timely delivery.”
The world’s fourth-largest cocoa grinder’s net profit more than doubled to RM67mil in the second quarter ended June 30 (2Q24) from RM28.1mil in the previous corresponding quarter.
The higher was due to increased revenue from cocoa ingredients and a higher contribution from the group’s industrial chocolate division in Germany. Despite the shortage of cocoa beans, global demand for chocolate continues to rise as tourism and festive activities increase.
In 2Q24, the group’s revenue jumped 91.6% to RM2.22bil from RM1.16bil previously, driven by increased selling prices and higher sales volumes of cocoa ingredients, particularly cocoa butter and cocoa powder.
Guan Chong’s net profit in the first half to June 30 tripled to RM160mil against RM51.9mil last year on a better grinding margin.
Its revenue increased 80.9% to RM4.09bil versus RM2.26bil in the same period last year, driven by higher selling prices of cocoa ingredients and industrial chocolate in line with higher cocoa bean prices.
