Guan Chong net profit falls 28% in Q2 despite revenue surge from elevated cocoa prices
The cocoa grinder’s profits declined on weaker demand and higher costs, even as revenue nearly doubled on strong ingredient pricing.
MALAYSIA – Guan Chong Bhd, the world’s fourth-largest cocoa grinder, has reported a 28.1% decline in net profit for the second quarter ended June 30, 2025, as high cocoa prices delayed shipments and lowered sales tonnage.
Net profit stood at RM48.2 million (US$11.4M), compared with RM67 million (US$15.9M) in the same period last year.
Despite softer demand, the group’s revenue jumped 74.9% year-on-year to RM3.89 billion (US$922.5M) from RM2.22 billion (US$526.4M), supported by higher selling prices of cocoa ingredients and industrial chocolate, in line with elevated bean costs.
Finance costs increased 35.6% to RM85.87 million (US$20.4M), while tax expenses rose sharply to RM24.2 million (US$5.7M) from RM13.22 million a year earlier.
For the first half of FY2025, Guan Chong posted revenue of RM8.19 billion (US$1.9B), more than double the RM4.09 billion (US$969.9M) recorded a year earlier. However, net profit eased 10.2% to RM142.8 million (US$33.9M) from RM160 million (US$37.9M), weighed by higher financing and tax obligations.
The company noted that while cocoa prices have eased from earlier peaks, they remain elevated. Strong prices have encouraged farmers to expand planting and improve farm management, leading to expectations of a small global surplus this year, with larger surpluses projected in the years ahead.
On the demand side, rising costs have led consumers to scale back chocolate purchases or opt for cheaper alternatives, pressuring overall demand.
Managing Director and CEO Brandon Tay Hoe Lian said the industry continues to face supply shortages and high bean costs but highlighted early signs of recovery as prices begin to moderate.
“Cocoa ingredients remain essential to chocolate production, and we are encouraged by early signs that demand will gradually recover as the market adjusts,” he said.
Guan Chong stated it will continue to focus on cocoa ingredient processing while expanding into higher-margin industrial chocolate and optimising production based on market conditions.
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