GUAN Chong Bhd (GCB) saw its net profit rise 57.2% to RM53.3m ($12.14m) in Q1 2022, from RM33.9m ($7.72m) in the previous corresponding quarter.
However, this gain should be weighed against the 30.5% drop in net profit for YE 2021. The company had shown a strong financial performance until last year, with profitability gains every year from 2017 until 2021, when the upward trend broke.
Currently, we have even achieved a forward sale of more than 50% of our capacity which is slated for delivery in 2023, a marked turnaround from a similar timeframe last year. The sales orderbook points to a good year ahead.Brandon Tay, group MD and CEO
GCB is a public company, listed on the main market in Malaysia since 2005. The company has 3 subsidiaries namely, Guan Chong Cocoa Manufacturer (GCCM), Guan Chong Trading (GCT) and Enrich Mix (EM).
They are the world’s fourth largest cocoa grinder, and have started to move downstream into the consumer ingredients business.
No doubt the company was eager to get back to profitability growth, and this quarter delivered thanks to an increase in grinding margins.
The company said a series of fortunate events contributed to the increased margin. A consumer-led recovery in the chocolate market in Europe and the US, combined with lower production costs driven by higher production volumes in the first quarter, explain the improved financial performance.
With international borders reopening for travel and the pandemic behind us, we expect the demand for cocoa ingredients to grow in tandem with the improved chocolate consumption in the developed markets of the US and Europe.Brandon Tay, group MD and CEO
The company is currently building a cocoa grinding plant in Côte d’Ivoire with a capacity of 60,000 metric tonnes. The plant is expected to be commissioned in the 3rd quarter of this year and will increase GCB’s total capacity by about 22%.