Guan Chong Doubles Profit For Q1 On Higher Chocolate Consumption In Europe And US

Guan Chong Berhad continued to enhance its grinding margin in the first quarter ended 31 March 2022, resulting in 57.2% rise in net profit to RM53.3 million from RM33.9 million in the previous corresponding quarter.

The better grinding margin reflected not only the recovery of key chocolate consuming markets in Europe and United States during the quarter, in contrast to the negative sentiments prior due to the COVID-19 pandemic but also lower production cost per metric tonne as a result of the increased production volume in 1Q22.

At the topline level, both the Group’s grinding operations in Malaysia and Indonesia, as well as the industrial chocolate subsidiary in Germany recorded improved revenues of RM990.5 million in 1Q22, 3.2% higher than RM960.1 million a year ago.

Managing Director and CEO Mr. Brandon Tay Hoe Lian commented “For the last two years we have faced multiple headwinds including COVID-19 pandemic, global supply chain interruptions, and uncertainties from the living income differential policy by the two largest bean producing countries in Africa.”

“Currently, we have even achieved a forward sales of more than 50% of our capacity which are slated for delivery in 2023, a marked turnaround from a similar timeframe last year. The sales order book points to a good year ahead.”

Meanwhile, the first phase of the construction works for GCB’s new cocoa grinding facility in Ivory Coast, Africa is expected to be complete by the third quarter of 2022. Upon commissioning, the facility will add 60,000 MT of annual grinding capacity to the Group, expanding the overall annual grinding capacity to 330,000 MT.

On overseas operations, Brandon Tay further added: “We stay true to the vision of becoming a key global player in the cocoa supply chain. With that vision, we will continue our expansion plans in United Kingdom, and upgrade plans for our facilities in Germany and US.”

“Nonetheless, we remain cautious and circumspect of the recent inflationary pressure, interest rate spike and rising energy cost as a result of Ukraine-Russia conflict. These multiple geopolitical and economic factors can create uncertainties to the economy and affect our business performance.”

To reward shareholders, GCB declared first interim dividend of 1.5 sen per share in respect of the financial year ending 31 December 2022, with ex-date on 17 June 2022 and payment date on 12 July 2022. The payout will amount to a dividend payout of RM15.9 million or 29.8% of net profit for 1Q22.

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