Confectionery and Beverage Ingredients
Key highlights for the year
Sales volumes in the Confectionery and Beverage Ingredients segment remained largely flat during the year.
Although Coffee volumes were up and Cocoa processing volumes were higher year-on-year due to a full year consolidation of results of the acquired Cocoa Processing assets, supply chain volumes in Cocoa declined as most of these became captive feedstock for processing. Supply chain volumes were also affected by reduced cocoa bean supply and quality for most of the year due to adverse weather conditions in West Africa.
Revenues were 12.4% higher than 2015 due to the increase in the sales of value-added cocoa products (cocoa cake, powder, liquor and butter) as well as the increase in prices and sales volume in Coffee.
EBITDA grew by 43.4% as both Cocoa and Coffee had stronger contributions. Cocoa’s increase in EBITDA was due to the consolidation of the results of the acquired Cocoa Processing assets, which performed better than expectations due to improved product ratios. However, these results were offset by the lower contribution from the supply chain business. Coffee achieved higher EBITDA in 2016 from the green coffee supply chain and soluble coffee business in Vietnam and Spain.
Compared with 2015, the segment recorded an increase in invested capital of S$428.6 million, in particular the working capital requirements as a result of higher coffee and cocoa prices. Fixed capital increased in-line with the expansion in upstream activities in Tanzania and Brazil and soluble coffee capacities in Vietnam and Spain.
EBITDA/IC for the segment improved marginally from 6.4% in 2015 to 6.9% in 2016.