Guan Chong Berhad (GCB) Q2 2024 earnings summary

Executive summary

• Q2 revenue rose 91.56% YoY to RM2,222.4m; profit before tax increased to RM80.2m from RM35.5m, supported by higher cocoa product selling prices and cocoa solids volume.

• H1 revenue was RM4,092.6m and profit for the period was RM159.0m, versus RM2,262.7m and RM51.9m, respectively, in H1 2023.

Financial highlights

• Q2 operating profit was RM143.4m versus RM67.0m YoY; profit attributable to owners was RM67.0m versus RM28.1m.

• H1 operating profit was RM310.5m versus RM123.4m YoY; finance costs were RM120.6m versus RM58.0m.

• H1 operating cash flow was negative RM1,098.3m versus negative RM306.4m; net current-asset changes used RM1,628.8m.

Outlook and guidance

• Weather volatility in cocoa-producing countries and geopolitical tensions may increase cocoa bean price volatility; high prices could weigh on demand.

• Port congestion is expected to lengthen the trade cycle and increase working capital needs; sourcing and working capital are being actively managed to support uninterrupted operations.

• Priorities include cocoa ingredient processing, expansion into higher-margin industrial chocolate, and production optimization in line with market conditions.