SINGAPORE (Feb 28): Cocoa ingredients producer JB Foods announced earnings of US$6.5 million ($8.6 million) for 4Q17, representing a fivefold increase from its earnings of US$1.1 million a year ago on margin improvements.
Quarterly revenue fell by 6.8% to US$75.5 million from US$81 million in 4Q16, mainly due to lower average selling prices (ASPs) to the group’s customers due to the lower cocoa bean prices.
Nonetheless, gross profit grew to US$12.2 million from US$8.6 million a year ago due to improvements in processing margin.
Other gains fell by 91.9% to US$0.2 million compared to US$1.8 million in 4Q16 as a result of a hedging mechanism to manage its forex exposures, notably the depreciation of GBP against USD in 4Q16 which affected the group’s GBP-denominated borrowings.
Administrative expenses fell 17.7% to US$1.8 million from US$2.2 million due to non-provision of doubtful debts made over the quarter compared to the US$0.6 million registered in 4Q16.
The latest set of 4Q results brings JB Foods’ FY17 earnings to US$14.2 million, up fourfold from its full year earnings of US$3.8 million a year ago.
Looking ahead, JB Foods CEO Tey How Keong says he expects chocolate consumption demand to remain good in 2018, and that he remains confident in the group’s long-term growth prospects.
While high volatility in cocoa bean markets and potential interest rate hikes may pose potential headwinds to JB Foods’ business, the group says it will continue to adopt conservative and prudent measures and strategies amid heightened global economic uncertainties.
Shares in JB Foods closed 0.75% higher at 68 cents on Wednesday.
