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Monday, November 25, 2013

Guan Chong sinks into the red in Q3 on forex, contract losses

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KUALA LUMPUR: Southeast Asia’s largest cocoa grinder Guan Chong Bhd posted net losses of RM11.84mil in the third quarter ended Sept 30, 2013 from earnings of RM27.41mil a year ago and is bracing for tougher times ahead.

It said on Monday loss before tax was RM12.74mil versus profit before tax of RM9.43mil a year ago mainly due to higher net loss on foreign exchange and higher net fair value loss on commodity future contracts.

“In addition, inventories write-down, attributable largely to lower in net realisation value of cocoa powder and cocoa cake also contributed to loss before tax for the current quarter,” it said.

Guan Chong's revenue fell 5.8% to RM328,28mil from RM348.47mil. Loss per share was 2.49 sen compared with earnings per share of RM5.76 sen.

On the outlook, Guan Chong said the cocoa ingredient prices continue to be volatile in the midst of competition as a result of market consolidation of cocoa players.

However, it was confident that with one of the largest capacities in the region, it was well positioned for the long term growth as the developing markets still see uptrend in demand for cocoa ingredients.

“The group has also put in place many growth-ready initiatives to enhance our competitiveness and profitability, in order to strengthen our position as globally-integrated cocoa ingredient producer,” it said.

For the nine months ended Sept 30, 2013, its earnings plunged 87% to RM12.12mil from RM94.02mil in the previous corresponding period. Revenue fell 2.3% to RM991.69mil from RM1.015bil.

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