KUALA LUMPUR (Aug 24): Guan Chong Bhd recorded a 6.6% lower net profit of RM56.98 million for its second quarter ended June 30 (2QFY20) compared to its 2QFY19 net profit of RM61 million as a result of higher cocoa bean prices.
Earnings per share likewise dipped to 5.65 sen from 6.38 sen a year ago, according to a bourse filing today.
The cocoa processor saw its quarterly revenue spike 20.94% to RM910.78 million from RM753.06 million a year ago, due to higher selling prices of cocoa products and revenue contributed by a newly-acquired subsidiary, Schokinag Holding GmbH.
Its year-to-date (YTD) revenue has similarly grown 29.91% to RM1.82 billion from RM1.40 billion in the corresponding period last year. Net profit for the same period rose 11.62% to RM129.14 million from RM114.14 million a year ago.
The group’s Singapore operations continue to be the biggest contributor to revenue YTD at RM1.96 billion, followed by its Malaysian and Indonesian arms at RM1.60 billion and RM619.59 million respectively.
The boom in revenue was offset by higher cocoa bean price during the period under review compared to the same quarter last year, which led to profit before tax hovering marginally lower at RM71.59 million versus last year’s figure of RM72.04 million.
On prospects, the group sees the uncertain impact of the Living Income Differential (LID) implementation and the ongoing Covid-19 pandemic as major challenges to the business environment for the financial year.
Guan Chong said travel restrictions implemented worldwide have resulted in economic slowdowns which subsequently shrank demand for chocolate, but believes that the impact is only temporary as it has seen a slight recovery in demand recently.
“Nevertheless, we are confident of our long-term prospect and uptrend in future chocolate demand. The group will continue to focus on efforts to explore new markets for its wide range of cocoa ingredients and optimise production according to market conditions,” Guan Chong said.
Guan Chong shares closed seven sen or 1.89% higher today at RM3.77, giving the group a market capitalisation of RM3.87 billion. Approximately 1.9 million shares were traded today.
The counter has been on an upward trajectory since slumping to an annual low of RM1.56 on March 19, and currently stands 22.4% higher YTD from RM3.08.
Edited by Lam Jian Wyn