Guan Chong to ride on steady demand for chocolate
Guan Chong Bhd’s prospects remain healthy, going forward, supported by sustained demand for chocolate as global air travel and tourism makes a recovery.
For the third quarter ended Sept 30, 2022 (3Q22), the cocoa manufacturer’s turnover increased by 10% year-on-year (y-o-y) to Rm1.1bil on higher selling price of cocoa solids and improved sales volume of cocoa butter.
Earnings, however, fell by 10.7% y-o-y to Rm30.8mil as margins took a hit during the quarter due to mark-to-market loss as a result of the weakening ringgit against the US dollar.
Rising finance cost, interest rates and energy costs in Germany also impacted profits in 3Q22, it said in a filing with Bursa Malaysia.
Basic earnings per share slid to 2.89 sen in the quarter under review from 3.32 sen in the same period last year.
Guan Chong booked an unrealised foreign exchange loss of Rm17.1mil in the period due to the strengthening of the US dollar against the ringgit and mainly from the group’s borrowings in US dollars being marked to the market.
Managing director and chief executive officer Brandon Tay Hoe Lian said the group remains optimistic of registering stable earnings as it continues to book increasing forward sales for its cocoa ingredients for FY23.
“Our operations face the rapidly changing market dynamics, such as the increasing interest rates and rising energy costs in Europe. Despite that, we maintained profitability so far for the year.
“We are circumspect of the challenges and will continue to focus on operational efficiency to sustain our profit margins,” he said in a statement.