JB Foods profit down 4.7% to RM11 million

Lackluster cocoa bean prices dragged down 2Q12 revenues of newly Mainboard-listed producer.

In its first set of results since listing on the Mainboard of the Singapore Stock Exchange, JB Foods and subsidiary JB Cocoa Sdn Bhd collectively known as the “Group”, posted earnings of RM10.5 million on the back of revenue of RM128.4 million for the three months ended 30 June 2012.

On a year-to-date basis, JB Foods achieved a revenue of RM271.6 million and a net profit of RM22.5 million for the six-month period ended 30 June 2012. The Group’s revenue was lower year-on-year mainly due to lower cocoa bean terminal prices, which resulted in lower average selling price for its cocoa ingredient products.

In addition, sales quantity decreased by 1,556 tonnes from 23,690 tonnes in 1H2011 to 22,134 tonnes in 1H2012 mainly due to the disruption in production caused by a planned integration of expansion works-in-progress. Nevertheless, despite the lower sales quantity, the Group’s gross profit margin in 1H2012 improved by 2.3 percentage points to 13.7%, from 11.4% in 1H2011.

For the period under review, cost of sales decreased by 23.3% to RM234.3 million in 1H2012, primarily in response to the “pass through effect” of lower cocoa bean terminal prices during the same period.

Going forward, over the next 12 months, the Group expects that the business environment will continue to be challenging as the global economic situation remains uncertain in light of the current Euro Zone debt crisis.

However, barring unforeseen circumstances, the Board remains positive about the Group’s businesses due to the expected increasing cocoa powder demand in Asia. The Group will endeavour to capitalise on this growing demand.

"The Group places strong emphasis on product development and providing customisation of cocoa ingredient products, especially cocoa powder, to fulfil the varied requirements of our customers. With our technical know-how and our expertise in blending, we are able to achieve consistency in our products in terms of flavours and colours to produce high quality cocoa ingredient products. This has earned us a strong reputation amongst global customers, who are mainly multinational companies," said Mr Tey How Keong, Chief Executive Officer of JB Foods.

"We believe we are in a good position to grow in tandem with such customers as they extend their presence in key Asian markets such as Indonesia, India and China," he added.

The Group also cited the construction of new production facilities which should increase its production capacity from 60,000 tonnes to 85,000 tonnes, and support increasing customer demand.