Friday 29 Mar 2024
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KUALA LUMPUR (Feb 24): Guan Chong Bhd, the world’s fourth largest cocoa grinder, posted a fresh record net profit of RM219.4 million for the financial year ended Dec 31, 2019 (FY19), up 15.4% from RM190.11 million in FY18.

Guan Chong attributed the better annual performance to a 20.1% year-on-year jump in sales volume for cocoa ingredients, in addition to enhanced operating efficiency. The growth in sales volume was supported by an expanded annual grinding capacity of 250,000 tonnes since the first quarter of 2019, compared to 200,000 tonnes previously.

Revenue for FY19 grew 29.4% to RM2.94 billion from RM2.27 billion in the previous year.

The group also proposed a final dividend of one sen per share for FY19, subject to its shareholders' approval at the forthcoming annual general meeting. This brings total dividends for the year to RM34.6 million or 15.8% of the group's net profit.

The record earnings were achieved despite net profit for the fourth quarter ended Dec 31, 2019 (4QFY19) declining 30% to RM44.73 million from RM63.88 million a year ago, as a result of increased tax provision which included a higher deferred tax liability arising mainly from the utilisation of capital allowance for the capacity expansion investment in the GCB Cocoa Malaysia (formerly Koko Budi) plant. This resulted in a lower earnings per share of 8.09 sen for 4QFY19 compared with 13.37 sen for 4QFY18.

Revenue for the quarter, however, increased 20% to RM796.4 million from RM663.37 million in 4QFY18.

On prospects, Guan Chong expects the business environment for FY20 to be challenging due to existing high market terminal price and uncertain impact of living income differential implementation.

"Apart from that, we expect the coronavirus outbreak to have slight impact on Asian and world economy. However, with the stable growth of global demand for chocolate, we foresee these impacts to be balanced out and thus having a neutral impact on our overall performance.

"The group will continue to focus on efforts to explore new markets for its wide range of cocoa ingredients, optimise production according to market conditions and expand overall grinding capacity," it added.

Guan Chong shares closed down 9 sen or 2.92% at RM2.99 today, with 3.67 million shares done, bringing a market capitalisation of RM3.02 billion.

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