CHOCOLATE maker Barry Callebaut reported a small rise in first-half sales volumes on Wednesday (Apr 10), easing fears that a sharp rise in cocoa prices and other inflationary pressures might hit demand and sending its shares as much as 10 per cent higher.
The 0.7 per cent increase in volumes in the six months to Feb 29 was broadly in line with the Swiss company’s guidance for flat full-year volumes, a target it reiterated.
Shares in the company, which supplies chocolate for Unilever’s Magnum ice creams and Nestle’s KitKat bars, were up 8 per cent at 10.35 am GMT, on track for their best day in eight years.
Vontobel analyst Jean-Philippe Bertschy said the volume figure was reassuring given the spike in raw material prices.
Cocoa prices have more than tripled over the last year as disease and adverse weather in Ghana and neighbouring Ivory Coast, the world’s top two producers, have hit production.
CEO Peter Feld said Barry Callebaut was well covered with cocoa beans thanks to its competitive edge in sourcing.
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“What goes up fast comes down fast at one point in time,” he added on a conference call, referring to cocoa prices.
In an emailed comment to Reuters, a spokesperson said the company expected high prices to lead farmers to invest more, “which should in turn boost supply”.
Finance chief Peter Vanneste said he saw a consistent positive trend in demand for cocoa, although “especially steep price increases can have an impact on short-term demand”.
The Zurich-based company also reported lower-than-expected half-year operating profit, hit by one-off expenses caused by its transformation plan, which aims to cut costs and speed up getting products to market, among other things.
Earnings before interest and tax fell 40 per cent in local currencies to 178 million Swiss francs (S$265 million), missing analysts’ forecast of 266 million francs, according to a company-provided consensus. REUTERS
