KUALA LUMPUR: Guan Chong Bhd's net profit fell 10.7 per cent in the third quarter (Q3) ended September 30, 2022 from RM34.5 million in the previous year's corresponding quarter.
The company said this was due to the impacts of rising interest rates and weakening ringgit during the quarter.
"The higher energy costs at the company's industrial chocolate plant in Germany, SCHOKINAG-Schokolade-Industrie GmbH (SCHOKINAG), also affected the group's overall profitability as a result of the Ukraine-Russia tensions," Guang Chong said today.
However, the company said its revenue rose 10.3 per cent to RM1.1 billion versus RM998.1 million last year.
This was attributed to higher average selling prices of cocoa power and increased sales tonnage of 5.2 per cent year-on-year.
For the nine months, the company's revenue grew 16.0 per cent to RM3.3 billion from RM2.8 billion in the same period last year, while its net profit increased 22.8 per cent to RM128.6 million from RM104.7 million.
The higher revenue was backed by an 11.7 per cent increase in cumulative sales tonnage year-on-year.
Managing director and chief executive officer Brandon Tay Hoe Lian said the company's operations faced the rapidly changing market dynamics, such as the increasing interest rates and rising energy costs in Europe.
Despite that, Tay said it had maintained profitability so far for the year.
"We are circumspect of the challenges, and we will continue to focus on operations efficiency to sustain our profit margins. In the meantime, we aim to secure more forward sales for our anticipated Ivory Coast facility and other plants in Malaysia and Indonesia," he said.
Guan Chong remains optimistic as it continues to book in increasing forward sales of its cocoa ingredients for the financial year ending December 31, 2023.
This was an indication of the continued resilient demand for cocoa ingredients, supported by recovery in global air travel and tourism, it said.