Zurich, April 3 - Swiss chocolate maker Barry Callebaut posted an 11 percent rise in net profit for its fiscal half-year on Tuesday, boosted by the industry's outsourcing trend.
The maker of chocolate for food manufacturers, artisans and chefs said net profit rose to 125.2 million Swiss francs ($103.1 million), narrowly beating the analysts' average forecast of 124.4 million francs.
"We are on track to reach our three-year financial targets for the period 2005/06 through 2007/08," said the group, which is active in cocoa cultivation and the production of semi-finished products for industrial and commercial customers.
The company expects annual top-line growth of 3-to-5 percent, operating profit growth of 8-to-10 percent and net profit growth of 12 to 15 percent.
Earnings before interest and tax (EBIT) rose 7.3 percent to 190 million francs versus 177 million francs in the previous year, while sales revenue rose 4.1 percent to 2.307 billion francs.
"An increasing number of food manufacturers are moving to outsource their chocolate needs to specialised partners. This trend is expected to accelerate as more integrated companies shift their focus towards sales and marketing and seek to source industrial chocolate from third parties," the group said.
In February, the group said it would acquire production capacity from Swiss food-giant Nestle and enter a long-term supply agreement with the world's largest food group in a move that was expected to boost sales volume from the 2007/08 fiscal year.
"The result is solid enough driven by continued demand for outsourced chocolate products by branded goods companies. The company says that its U.S. consumer products business is under review, which is probably positive, given it has never really fitted into the group," said Jon Cox, analyst at Kepler Equities.
Shares in Barry Callebaut, which produces chocolate for mass-market confectionars as well as making its own up-market products, have risen nearly 50 percent so far this year, peaking at an all-time high of 986 francs in March.
The market is awaiting news on a large outsourcing contract from U.S. chocolate maker Hershey Co. and analysts say that this has contributed to the recent rise in Barry Callebaut's shares.
Barry Callebaut shares are trading at about 24 times estimated earnings, while rival Swiss chocolate maker Lindt & Spruengli is trading at around 29 times, according to Reuters data.