By Andrey Sychev and Mateusz Dobrzyniewski
-Sales from the world's biggest chocolate-maker Barry Callebaut rose slightly in the three months to the end of November, as the company managed to pass on some of the impact of a surge in cocoa prices.
The company, which supplies chocolate for the Magnum ice creams made by Unilever (LON:ULVR) and for Nestle's KitKat bars, said sales volumes increased by 0.4% to 580,876 tonnes versus the 578,300 tonnes estimated in the company-provided median consensus.
The Q1 rise compares with 579,000 tonnes in the same period a year ago, when a salmonella outbreak at its biggest factory in Wieze, Belgium, hampered production.
Barry Callebaut's shares rose 2% in the Julius Baer pre-market trade.
Sales increased by 14% in local currencies (up 6.1% in Swiss francs) to 2.24 billion Swiss francs ($2.58 billion) as the group passed on some of the increase in raw material prices by offering more private label products, Barry Callebaut said.
"Barry was able to deliver on market expectations, which is key in this challenging period of rebuilding investor trust", Vontobel analyst Jean-Philippe Bertschy said, adding the company has undertaken "significant" refinancing measures to address rising cocoa prices.
In November, prices for cocoa beans on the New York exchange (ICE) hit the highest in 46 years due to a supply deficit caused by adverse weather, tree illnesses and capacity shortages.
"With the recent weaker-than-expected cocoa bean harvest data from West Africa, the cocoa price development continues to remain uncertain. The group foresees an industry-wide impact on working capital requirements," the company said in a statement.
To cushion the price impact, the chocolate-maker issued a 600 million Swiss franc bond to refinance its 450 million euro ($489.02 million) debt due in mid-May and extended its revolving credit facility by around 400 million euros.
Despite price uncertainty, the company maintained its 2023/2024 outlook and continues to guide for flat volumes and EBIT (earnings before interest and tax).
($1 = 0.8687 Swiss francs)
($1 = 0.9202 euros)