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This article first appeared in The Edge Financial Daily on November 19, 2019

KUALA LUMPUR: Cocoa processing company Guan Chong Bhd is likely set for a “bumper year” with a record profit performance for financial year 2019 (FY19), after its third-quarter (3Q) net profit jumped 38% year-on-year.

Its net profit rose to RM60.53 million for 3Q ended Sept 30 from RM43.87 million for the year-ago quarter, while revenue expanded 24% to RM744.61 million from RM598.78 million, its stock exchange filing yesterday showed.

The group, the world’s fourth largest cocoa grinder, declared a third interim dividend of one sen per share for FY19, payable on Jan 3, 2020.

The improved 3Q pushed its cumulative nine-month net profit to RM174.65 million, up 38.4% from RM126.23 million for the corresponding period a year ago, while cumulative revenue increased 33% to RM2.15 billion from RM1.61 billion.

In a press statement, Guan Chong managing director and chief executive officer Brandon Tay Hoe Lian said the group saw robust demand for its products and recorded high capacity utilisation. The group’s growth was supported by a recent 25% expansion in annual grinding capacity to 250,000 tonnes in 1QFY19. By 3QFY19, Guan Chong achieved near-full capacity utilisation of 98%.

“With the robust demand and high capacity utilisation, we continued to produce a strong performance. At the current rate, we are likely set for a bumper year with a record profit performance for FY19.

“We are targeting significant growth in the next five years to strengthen our position as a global cocoa ingredients supplier, as we increase our production capacity and pursue more exports to existing and new markets. This comes as demand for chocolate remains on an uptrend, due to rising consumption in major markets like Europe and the US, and sanguine Asian demand on rising affluence and appetite for cocoa products,” Tay said.

Guan Chong shares rose 16 sen or 6.81% to close at RM2.51 yesterday, with three million shares changing hands, giving it a market capitalisation of RM2.53 billion.

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