Barry Callebaut sees a second year of flat sales volumes on high cocoa prices
3:52 am Wednesday, November 06th, 2024
By Andrey Sychev
(Reuters) – Swiss chocolate maker Barry Callebaut posted annual profit growth as it managed to pass on surging cocoa prices to customers but expects a second straight year of flat sales volumes as prices of the key ingredient remain high.
Shares in the company were up 1.7% in Julius Baer pre-market trade.
The firm said in a statement there was “significant uncertainty on how cocoa-related price increases will impact short-term demand,” adding that it would defend its market share in a challenging environment.
Cocoa bean prices hit an all-time high of about $12,540 per metric tonne in April and have almost doubled in the last 12 months to November.
That has hurt Barry’s cash flow, which stood at minus 2.3 billion Swiss francs (-$2.7 billion) for the year to end-August and caused it to borrow 2 billion francs, tripling its net debt.
But the chocolate maker managed to pass on higher costs to customers, with annual revenue rising 22.6% to 10.4 billion francs and recurring operating profit, adjusted for one-off items, up 6.8% to 704.4 million francs.
Its chocolate sales volumes were unchanged at 2.279 million tonnes by the end of the company’s fiscal year in August, just under a company-compiled consensus of 2.283 million tonnes.
Volumes fell 1.2% in the fourth quarter, hit by weaker sales for the company’s high-end gourmet unit and a temporary production halt at its Mexican plant in August.
J.P. Morgan analysts have said they expect increases in chocolate prices to weigh on sales for the company.
($1 = 0.8725 Swiss francs)
(Reporting by Andrey Sychev, Editing by Rachel More and Edwina Gibbs)
