JOHOR: The world’s fourth largest cocoa grinder Guan Chong Berhad in the third quarter ended Sept 30, 2024 (3Q24) recorded a net profit of RM57.2 million, increasing 68.7% from
RM33.9 million in the previous corresponding quarter on higher sales volume.
In 3Q24, the Group recorded revenue of RM2.98 billion, a 131.5% increase from RM1.29 billion previously. The growth was a result of higher selling prices and sales volume of cocoa ingredients, particularly cocoa powder.
During the quarter, the Group continued to fulfil its order book to global clientele for their rising demand of cocoa ingredients, despite the ongoing global bean shortage.
Managing Director and CEO, Brandon Tay Hoe Lian said: “We have been experiencing increasing difficulties to fill up our enlarged production capacity due to the ongoing short supply of beans, which has limited our profit potential. Additionally, the persistently high bean prices continue to pose 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.”
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 nine months ended Sept 30, 2024 (9M24), the Group’s revenue increased 99.2% to RM7.07 billion versus RM3.55 billion in the same period last year, driven by higher selling prices of cocoa ingredients and industrial chocolate in line with higher cocoa bean prices. As a result, the Group’s net profit in 9M24 more than doubled to RM216.2 million in comparison to RM85.8 million on better grinding margin.
Tay said: “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.”
Meanwhile, the Group declared a first interim single-tier dividend of 1.0 sen per share in respect of the financial year ending Dec 31, 2024, with the payment ex-date on Dec 12, 2024 and payment date on Dec 27, 2024. The dividend represents a dividend payout of RM11.7 million or 5.4% of the Group’s 9M24 net profit.
