Barry Callebaut sees a second year of flat sales volumes on high cocoa prices
Recasts and writes through
By Andrey Sychev
Nov 6 (Reuters) -Swiss chocolate maker Barry Callebaut BARN.S 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)
Cocoa bean prices hit all-time high in April https://reut.rs/3UDbSKw
Reporting by Andrey Sychev, Editing by Rachel More and Edwina Gibbs
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
