Barry Callebaut profits slip after investments

by Jeff Gelski
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ZURICH, SWITZERLAND — Net profit dropped for Barry Callebaut in the six months ended Feb. 29 even though sales grew and the company outperformed the global chocolate market.

Net profit of 175.1 million Swiss francs ($193.1 million) over the six-month period compared to 200.2 million Swiss francs in the same time period of the previous year. Revenue increased to 2,476.9 million Swiss francs ($2,731.9 million) from CHF2,404 million, and volume increased to 699,058 tonnes from 655,065 tonnes.

Net profit from continuing operations declined due to lower EBIT, higher financing costs related to the bond placement in the summer of 2011 as well as a less favorable tax mix, according to Barry Callebaut.

“After an anticipated slow start in Q1, we gained momentum in Q2, in all regions and across all product groups,” said Juergen Steinemann, Chief executive officer of Zurich-based Barry Callebaut. “Once again, we outpaced the global chocolate market. Several major new partnership deals were signed, confirming an important part of our business model. In the last six months, we initiated selective investments in our future growth. This temporarily affected our bottom-line results.”

In the United States, the chocolate confectionery market decreased 2%. Barry Callebaut maintained its double-digit growth momentum in the Americas region. Sales volumes grew at 19% to 176,898 tonnes. In North America both corporate as well as national accounts and the gourmet business showed double-digit growth rates.

A good start to the cocoa crop in the 2011-12 season as well as a well-stocked industry caused cocoa terminal market prices to move continuously downwards during the six-month period, according to Barry Callebaut. Better-than-expected sugar crops in Russia and Brazil combined with exports from India led to a surplus on the world sugar market.

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