KUALA LUMPUR (Nov 24): Manufacturer and trader of cocoa derived food ingredients Guan Chong Bhd swung back to profitability in its third quarter ended Sept 30, 2015 (3QFY15) with a net profit of RM21.69 million or 4.55 sen per share, on higher sales and gross profit as it managed to clear off its cocoa solid stocks.

In comparison, it recorded a net loss of RM13.24 million or 2.78 sen a share in the same quarter a year ago, its filing to Bursa Malaysia today showed.

Revenue for 3QFY15 had also jumped 72.2% to RM708.83 million from RM411.55 million a year ago, due to the higher average selling price and volume of cocoa cake and powder sold.

For the nine months ended Sept 30, 2015 (9MFY15) Guan Chong reported a net profit of RM21.79 million or 4.58 sen a share, from a net loss of RM8.11 million or 1.7 sen a share a year ago.

Its cumulative revenue also rose 31.3% in 9MFY15 to RM1.73 billion, from RM1.31 billion a year ago.

On prospects, the group expects the business environment for the financial year ending Dec 31, 2015 to be challenging.

"While the cocoa bean prices continue to be volatile, the demand for cocoa solids remains uncertain. The group will continue to focus on turnaround efforts, which include reducing inventory level, exploring new markets for its wide range of cocoa ingredients, growing industrial chocolate business and optimising production according to market conditions," it said.

Guan Chong shares closed down two sen or 2.3% at 85 sen today, with a market capitalisation of RM414.36 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)