ZURICH (Reuters) - Chocolate and cocoa product maker Barry Callebaut (BARN.S) reported a 40 percent jump in annual net profit on Wednesday and stretched out its guidance for 4-6 percent growth in volume by one year to 2018/19.
Global chocolate confectionery sales are stagnant as consumers prefer healthier snacks, but the Swiss company has benefited from big food companies outsourcing chocolate production and its fast-growing gourmet business with chefs and pastry makers.
“We were expecting the lower cocoa bean price to be partly passed on to consumers so that is what we are seeing now,” Chief Executive Antoine de Saint-Affrique told reporters on a call on Wednesday.
He said demand was accelerating at the moment, citing dynamic developments in the Middle East, Africa and Asia, a nascent rebound in the United States and a more muted situation in Europe.
Cocoa bean prices fell by about a third during its fiscal year to the end of August, but have recently stabilised.
Chief Finance Officer Victor Balli, whose retirement by the end of February was also announced, said he was expecting to still see a positive impact from cocoa prices in the first half of the new fiscal year.
Balli will be replaced by Remco Steenbergen, who joins from Royal Philips.
Full-year net profit rose 40 percent to 303 million Swiss francs (231.00 million pounds), topping the 293 million estimate in a Reuters poll, including a positive one-off effect of about 18 million francs from an acquisition.
The company proposed a dividend of 20 francs per share for 2016/2017, ahead of expectations for 17.8 francs.
“Strong results indeed, however largely inflated by high combined cocoa ratio and low cocoa price. Difficult to track the genuine, underlying improvements,” Vontobel analyst Jean-Philippe Bertschy said in a note.
The company, which supplies chocolate to large food companies such as Nestle (NESN.S) and Mondelez (MDLZ.O), extended its mid-term guidance to the end of 2018/2019 for 4-6 percent volume growth and earnings before interest and taxes above volume growth in local currencies.
Sales volumes increased by a better-than-expected 4.4 percent, driven by a good performance at its gourmet business and outsourcing contracts, with overall sales revenue of 6.81 billion francs.
At the group’s global cocoa business, where some less profitable contracts were terminated last year, volumes started to grow again and operating profit rebounded.
Shares were down 2 percent in early trading.
Additional reporting by Nigel Hunt in London; editing by Michael Shields and Jason Neely