The group’s chocolate arm, its third largest operating area behind cold cuts and biscuits, grew sales 5% in the second quarter to COP 245.1bn ($130m). However, EBITDA for the chocolate division plummeted 23.1% to COP 26.3bn ($14m).
The cocoa impact
“In chocolate the effect is basically because of the raw material, cocoa has had its impact – that’s why we have the decrease,” said Nutresa CFO Jose Domingo Penagos during the company’s earnings call yesterday.
“Cocoa grew in price 44%, so this has a big impact on our profitability in chocolates,” he said.
According to the International Cocoa Organization (ICCO), the averages daily cocoa prices for July 2014 stood at $3,196 up 38% on last year.
Cocoa accounts for 4.4% of Grupo Nutresa’s overall raw material costs, which come mostly from labor charges and packaging materials.
The company’s CEO Carlos Ignacio Gallego said in the webcast that this meant the company would not be affected by El Niño weather phenomenon, which has the potential to devastate the cocoa supply.
“The effects of El Niño on traditional raw materials are included in our prices,” he said.