SINGAPORE: Petra Foods downbeat over low cocoa prices
Petra Foods, the Singapore-based consumer and B2B chocolate and cocoa group, has sounded a warning over the prospect of lower cocoa prices on its ingredients business this year.
The company, which supplies to customers including Kraft Foods, Mars Inc and Barry Callebaut, saw sales from cocoa ingredients fall by almost 13% in the first three months of the year on the back of "weaker" cocoa bean prices.
Petra Foods said EBITDA from the division, which accounts for the majority of its turnover, increased 1.4%. However, it warned the division's results in 2012 could be lower than last year if the trend on cocoa prices continues.
"Although the cocoa ingredients started the year on a positive note, the industry and market is facing headwinds in the form of pricing pressure as a result of the excess supply situation. If the situation persists, the financial performance of our cocoa ingredients division in 2012 is expected to be significantly lower than that achieved in 2011," CEO John Chuang said today (10 May).
The fall in revenue from Petra's cocoa ingredients arm led to lower overall turnover in the first quarter of 2012. Revenue fell 7% to US$402.6m despite a 9.5% increase in branded consumer sales. The higher sales from consumer products helped boost earnings from that division, with EBITDA up 27.3%.
Group EBITDA increased 13.5% to US$34.5m. Net profit rose 20.5% to US$16.3m.
Chuang said: "The performance of our Branded Consumer Division in 2012 is expected to remain strong, essentially a continuation of the growth momentum already generated in the first quarter of 2012. The consumption environment in our regional markets is expected to remain vibrant supported by the strong regional economies and fast growing middle income class."
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