Chocolate maker and cocoa processor Barry Callebaut reported a decline in sales volume for its first quarter, as anticipated orders were delayed due to its clients renegotiating product prices with retailers, driven by record high cocoa costs. The company’s shares fell 4.3% as a result, reaching the bottom of Europe’s benchmark index.
The company, which supplies chocolate for Unilever’s Magnum ice creams and Nestle’s KitKat bars, stated that its sales volume decreased 2.7% to 565,000 tonnes in the period ending November 30, falling short of analysts’ forecast of 568,000 tonnes.
Barry Callebaut also expects its annual sales volume to decline by a low single-digit percentage, after previously forecasting flat cocoa sales volume for the year. However, the company reaffirmed its target for double-digit growth in recurring operating profit on a constant currency basis.
Cocoa prices have reached a record high, trading in London at around £9,240 per metric ton, and are expected to continue to rise, prompting further price hikes. Analysts at Baader Helvea noted that the effects of the cocoa price increases are beginning to show in the company’s results.
Barry Callebaut is issuing a 300 million Swiss francs ($331 million) bond to address the high costs and ensure liquidity. The company is facing a “continued challenging situation,” according to Vontobel analyst Jean-Philippe Bertschy, with the soaring raw material costs expected to last.
