Strong franc eats into chocolate-maker's profits
Swiss chocolate and cocoa giant Barry Callebaut on Wednesday posted annual sales sweetened by rising cocoa prices, but the impact of a stronger Swiss franc ate into its profit.
The world's leading cocoa company said it raked in a net profit of 239.9 million francs ($241.9 million) for its fiscal year ending in August, down 5.9 percent from the previous fiscal year.
Following the announcement, the company saw its share price plunge 7.09 percent to 18.76 Swiss francs a piece in mid-morning trading as the overall market rose slightly.
The slumping net profit was largely attributed to a foreign exchange loss amid the soaring value of the Swiss franc, as well as higher financing requirements mainly due to higher cocoa bean prices and swelling income tax expenses, the company said.
Increased volumes helped boost Barry Callebaut's sales 12.1 percent when expressed in local currencies.
The strong franc however ate away about half of that increase once converted to the Swiss currency, leaving the company's annual sales up by just 6.4 percent at 6.2 billion francs.
Over the fiscal year, Barry Callebaut saw its sales volumes tick up 4.5 percent to 1.79 million tonnes.
Sales were particularly strong in the fourth quarter, allowing the Zurich-based company to easily outpace the global confectionery market, which dipped 2.7 percent during the year.
"As we have done consistently for the last ten years, we managed to outpace the market and delivered solid, profitable growth," company chief Antoine de Saint-Affrique said in the earnings statement.
Going forward, he said the company had identified "significant growth opportunities."
"However, we foresee a challenging fiscal year 2015/16 due to the current cocoa products market, which will temporarily affect our profitability," he said.
For the fiscal year ended in August, the company said it would propose paying shareholders a dividend of 14.50 francs per share.