RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Cocoa boost helps AAK shares hit record high

Twitter Linkedin

Vegetable fats processor AAK reported a higher than expected rise in profits, helped by a boost to its chocolate division from elevated cocoa prices, which spurred demand for alternatives made by the group.

Shares in the Swedish-based group hit a record high.

AAK reported operating profits for the January-to-March quarter of SEK321m a rise of 12% year on year, and ahead of the SEK310m result that investors had expected.

The "high and solid" performance was driven by a "continued strong improvement" in the chocolate and confectionery fats division, which raised operating profits by 17% to SEK136m, said Arne Frank, the AAK chief executive.

He added that the division was expected to be one of the "main drivers" in the "continued positive underlying development" of the group, over which he was "prudently optimistic about the future".

Butter boost

The rise in chocolate division operating profits came despite a drop of 6% in sales volumes, reflecting "severely deteriorating market conditions in Ukraine and Russia", amid the region's economic and political unrest.

Divisional sales by value rose by 7% to SEK 1.26bn, as higher value products accounted for a greater share of trade, with the rising popularity of AAK's alternatives for cocoa butter boosting margins too.

A rise of 25% to SEK1.89 in the business's average operating profit per kilogramme of product was in the main down to a "higher proportion of cocoa butter equivalent in the total product mix, supported by a high cocoa butter price".

Cocoa butter prices have been supported by values of beans themselves, which during the January-to-March quarter averaged well above the £1,822 a tonne they did on London's futures exchange in the first quarter of 2014, on Commerzbank estimates.

London cocoa futures traded between £1,891 a tonne and £2,062 a tonne in the first quarter of 2015, on a front contract basis.

Shares rise

AAK, which makes its cocoa alternatives from the likes of shea butter, underlined that it expected "continued improvement" at its chocolate and confectionery fats division.

AAK shares stood 1.9% higher at SEK 530.00 in lunchtime deals in Stockholm, earlier hitting an all-time high of SEK533.00.

By Agrimoney.com

Twitter Linkedin
Related Stories

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069