Barry Callebaut has recorded flat revenues in its first quarter results released today as cocoa ingredient prices fell year-on-year.
Company sales dropped 0.6% to CHF1.25bn ($1.34bn), while volumes rose 8.3%.
Callebaut put the sales drop down to reduced cocoa powder sales.
Cocoa ingredients prices
Sales in the company’s global sourcing and cocoa segment, which accounts for around a quarter of Callebaut’s business, fell 13.1%. All other business areas recorded sales growth.
“This is mainly because sales prices for cocoa ingredients (cocoa butter, cocoa liquor, and cocoa powder) were lower at the time the business was contracted,” said the company.
Callebaut said that cocoa prices peaked at £1,700 per metric ton in early September as the Ivory Coast reformed its cocoa sector before priced levelled off to between £1,500 and £1,600 for the following two months.
Ivorian government reforms have set maximum mold and moisture levels for cocoa beans and a guaranteed farmgate price of 725 CFA francs per kg.
Petra Foods operations
Callebaut has added what it calls “a strong sourcing base besides West Africa” in the emerging Asian market.
In December last year, the company acquired Singapore-based Petra Foods’ cocoa ingredients division for $950m, which boosts Callebaut’s presence in emerging markets by one third of its sales volume.
“This will strengthen Barry Callebaut’s current and future outsourcing and strategic partnership agreements as there is a trend towards combined deals (cocoa and chocolate products),” it said today.
The deal is expected to close by summer 2013.
Other regions and outlook
Callebaut said that Western Europe “remained challenging”, particularly Southern Europe.
However, its Food Manufacturers Products business - which includes cocoa and chocolate products, coatings and cocoa powders - performed well in Russia, the Middle East and Turkey.
Mexico was a highlight for the firm in the Americas. Company’s sales volume rose 14.7% in the region to 104,898 tons, which helped it to register 6.3% sales growth.
The company has set four year growth target from 2011/12 – 2014/15 of 6-8% EBIT and volume growth.