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https://i-invdn-com.investing.com/trkd-images/LYNXNPEK3906J_L.jpg(Reuters) -Chocolate maker Barry Callebaut reported half-year sales volumes broadly unchanged from a year earlier, in line with its annual guidance for flat volumes, reiterated on Wednesday.
The firm, which supplies chocolate for the soon-to-be-spun-off Magnum ice creams made by Unilever (LON:ULVR) and for Nestle’s KitKat bars, said that rising cocoa prices and the broader inflationary environment drove revenue up by 11% in Swiss francs. The consensus had expected an increase of 5.7%.
Shares in the Swiss company were up 6% at 0700 GMT.
Vontobel analyst Jean-Philippe Bertschy said the volume figure was a reassuring result considering the significant increase in the raw material’s price.
Climate change, years of insufficient planning and tree diseases have brewed a perfect storm for farmers in Western Africa, a region which accounts for roughly 70% of global cocoa supplies, driving prices to historical highs.
Cocoa now trades at a higher price than copper.
The Zurich-based company also reported lower-than-expected half-year operating profit, hit by one-off expenses caused by its transformation plan, which, according to what it said in a statement, is progressing as planned.
The plan, dubbed BC Next Level, was first announced in September 2023 and aims to reduce annual costs by 250 million francs.
Barry Callebaut’s earnings before interest and tax fell 40% in local currencies to 178 million Swiss francs ($197 million) on a reported basis in the six months to the end of February.
Analysts were expecting an EBIT of 266 million francs, a company-provided consensus showed.
Despite the fragile situation and the negative free-cash-flow trajectory, “it looks like the organization is digesting the recent negative newsflow and embracing the Next Level strategic roadmap,” Bertschy said.
($1 = 0.9036 Swiss francs)
