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2024 04 10T052050Z 1 LYNXNPEK3906J RTROPTP 4 BARRY CALLEBAUT RESULTS scaled - Business Express

Barry Callebaut operating profit falls 40% on transformation costs


Barry Callebaut operating profit falls 40% on transformation costs

(Reuters) -Barry Callebaut, the world’s biggest chocolate maker, reported lower than expected half-year operating profit on Wednesday, hit by one-off expenses caused by its transformation plan.

The Swiss-based company’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.

Barry Callebaut, which supplies chocolate for the soon-to-be-spun-off Magnum ice creams made by Unilever and for Nestle’s KitKat bars, said that increasing cocoa prices and the broader inflationary environment drove revenue up by 11% in Swiss francs. The consensus had expected an increase of 5.7%.

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.

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Cocoa now trades at a higher price than copper.

Barry Callebaut said half-year sales volumes were broadly unchanged from a year earlier, in line with its annual guidance for flat volumes.

($1 = 0.9036 Swiss francs)

(Reporting by Paolo Laudani and Mateusz Dobrzyniewski; editing by Milla Nissi)

 

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