KUALA LUMPUR (Aug 26): Guan Chong Bhd’s (KL:GCB) net profit for the second quarter ended June 30, 2024 (2QFY2024) surged more than twofold to RM67 million from RM28.13 million a year earlier, driven by higher selling price for cocoa products and increased sales volume for cocoa solids.

In a bourse filing on Monday, the cocoa manufacturer also reported a 91.56% rise in revenue to RM2.22 billion from RM1.16 billion, reflecting the impact of these factors.

Earnings per share was 5.70 sen versus 2.39 sen previously. There was no dividend declared.

On a quarter-on-quarter basis, the group's net profit fell 27% from RM92.04 million in 1QFY2024 despite an 18.8% rise in revenue from RM1.87 billion, as operating margins narrowed to 6.4%, from 8.9% in 1QFY2024. Operating margin in 2QFY2023 was 5.8%.

For the six months ended June (1HFY2024), Guan Chong has achieved a net profit of RM159 million, up from RM51.9 million in the year before, marking a threefold increase. Revenue for the period reached RM4.09 billion, compared to RM2.26 billion previously.

On prospects, the group noted that it will continue to focus on its core business of cocoa ingredient processing while also expanding into the higher-margin industrial chocolate market and optimising production in accordance with market conditions.

Meanwhile, it said unpredictable weather conditions in cocoa-producing countries and geopolitical tensions are impacting the cocoa industry, as it is likely to lead to volatility in cocoa bean prices.

“High cocoa bean prices could impact demand, and the group continues to monitor this closely and adjust to market conditions as needed.

“Additionally, recent port congestion is anticipated to prolong the group’s trade cycle, resulting in higher working capital needs,” it said.

At the close of trade, Guan Chong’s share price was down five sen or 1.47% at RM3.35, valuing the company at RM3.94 billion.