Cocoa price surge eats into Barry Callebaut sales volumes
Source: AFP
The world's top industrial supplier of chocolate, Barry Callebaut, reported Thursday a dip in sales volumes in its latest quarter as a jump in cocoa prices bit into demand.
Figures released by the Swiss firm showed that sales volumes slid 0.3 percent in the company's third quarter, which runs from March through May, while sales revenues surged nearly 27 percent to 2.68 billion Swiss francs ($2.98 billion).
Over the first nine months of its fiscal year that runs through August, sales volumes were still up 0.4 percent to 1.7 million tonnes and revenues climbed 16.3 percent to 7.32 billion francs.
Global cocoa prices were up 131 percent during that period, but Barry Callebaut said most of its contracts allow it to recoup increases in input prices.
The evolution of nine-month sales volume and revenue figures were in line with the expectations of analysts surveyed by Swiss financial news agency AWP, but the company's shares tanked eight percent in morning trading.
"In an unprecedented cocoa environment, we are pleased with achieving a slight increase in volume for the first nine months," chief financial officer Peter Vanneste said in a statement.
The company pointed to a 0.8 percent increase in its chocolate sales despite the global confectionary market sliding 1.5 percent according to data firm Nielsen as manufacturers faced softer consumer demand in the face of higher prices.
Barry Callebaut supplies cocoa and other chocolate products to food industry giants including Hershey, Nestle and Unilever.
"Looking ahead, the market faces further challenges, particularly from supply turbulence and cocoa-related price increases," Vanneste said.
The company kept its full-year guidance of flat sales volume growth and steady recurring operating profits. It reports annual results on November 6.
London cocoa prices hit a record of 9,285 pounds per tonne on April 19, and are currently trading at around 6,700 pounds per tonne.
Barry Callebaut is in the midst of a restructuring that will see job cuts and major investments to modernise its operations and tap into growing Asian markets.
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Source: AFP
