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KUALA LUMPUR: Cocoa grinder Guan Chong Bhd reported lower net profit in the second quarter, as sales were affected by the Covid-19 pandemic.
Weaker cocoa prices and higher freight cost contributed to the lower margin.
Revenue declined 4% to RM876mil in the three-month ended June 30 compared with RM910mil a year ago.
Net profit dropped 36% to RM36.4mil from RM57mil previously. Guan Chong said this was mainly due to lower revenue and margin achieved during the quarter under review. "Covid-19 has become widespread in certain Asian countries and this has slightly affected the demand. Future demand will depend on the speed of vaccine rollout in those countries in the coming months," it said.
"Container shortage issue continues to pose a problem to the cocoa industry as it increases the freight cost. We expect this issue to persist at least until the beginning of next year and hence we foresee shipment this year will be delayed," it added.
However, the company expects the logistic issue to "only slightly affect" the cost and shipments of imported cocoa beans.
"Nevertheless, we are confident in our long term prospect and the uptrend of future chocolate demand. The Group will continue to put strong focus on exploring new markets, especially in the European region, for its wide range of cocoa ingredients as well as industrial chocolate, and to optimize production according to the market conditions," Guan Chong said.