Barry Callebaut issues profit warning as cocoa prices fall

Swiss chocolate maker Barry Callebaut cut its operating profit forecast on Thursday, citing falling cocoa prices, overcapacity in the industry and potential supply disruption linked to the Iran war.

The company, the world’s largest chocolate producer, has now said this expected It predicts earnings before interest and taxes (EBIT) will decline by a “mid-teens” percentage in the 2025-2026 fiscal year.

The outlook reflects a significant downgrade for the Zurich-based company from just three months ago. in question was preparing for a return to growth.

Hein Schumacher, who was appointed CEO of Barry Callebaut in late January, said on Thursday that the firm had a “unique market position” and key growth opportunities, while warning of a “turbulent period” of disruption in the industry.

“Cocoa bean prices fell in the first half of our financial year, which is encouraging for the future momentum of the chocolate market and supported strong free cash flow generation,” Schumacher said in a statement. he said.

“However, the unprecedented pace of decline in the market, combined with the competitive overcapacity market, volume declines and supply disruption, impacted EBIT performance and adjusted our profitability outlook for the year as we prioritize recovering volume and steering the market back to growth,” he added.

Shares of Barry Callebaut fell as much as 17% on Thursday. The stock was last trading around 15.8% shortly after 2:30pm London time (9:30am ET).

Cocoa prices fell 0.72% to $3,537.28 per ton on Wednesday. Despite last week’s rise, cocoa prices have fallen 41.6 percent since the beginning of the year and 57.6 percent in the last 12 months. Trade Economy data.

Like many commodities, the closure of the Strait of Hormuz affected cocoa prices, leading to limited supply and higher costs. However, much stronger harvests have kept cocoa costs under control compared to recent years when prices have risen.