BARRY CALLEBAUT AG 
LONDON (Reuters) - Swiss chocolate maker Barry Callebaut (>> Barry Callebaut AG) reported bigger-than-expected gains in half-year sales and profits as cost cuts helped counter the impact of the surging Swiss franc, and confirmed mid-term targets subject to the currency swings.
The company, which sells chocolate and other cocoa products to candy makers such as Nestle (>> Nestle SA) and Hershey (>> Hershey Co), said on Wednesday that sales jumped nearly 12 percent to 3.24 billion Swiss francs (2 billion pounds) in the half year ending Feb. 28.
Net profit rose nearly 11 percent to 132.4 million francs.
Analysts on average had expected sales of 3.20 billion Swiss francs and net income of 128 million, a Reuters poll showed.
"The commitment from management to focus on profitable growth and (return on invested capital) is paying off," said Vontobel analyst Jean-Philippe Bertschy, calling the results "robust".
The company's shares jumped 9 percent to 1040 Swiss francs at the market open. They were trading up 7.3 percent at 1021 francs as of 0717 GMT.
Switzerland-based companies like Barry Callebaut are seeing the value of their international sales and profits reduced by the higher Swiss franc.
The currency soared against the euro in January following the Swiss National Bank's surprise removal of a cap on its value. It has weakened slightly, but remains roughly 10 percent higher than before the removal of the cap.
Barry Callebaut conducts nearly all of its business outside Switzerland, so has very limited operational exposure to the soaring franc. Yet the currency translation impact reduced the group's operating earnings by 8.7 million francs, it said.
Sales volume growth accelerated to 3.9 percent in the second quarter from 0.2 percent in the first, fuelled by efforts to boost processing capacity. The company expects further sales acceleration in the fiscal year, as more of its customers outsource chocolate production to Barry Callebaut, the world's leading chocolate manufacturer.
The company confirmed its mid-term targets, calling for sales volume growth to average 6 to 8 percent per year.
"When we look at our second half-year we see a very, very strong portfolio at hand so we feel comfortable," Chief Financial Officer Victor Balli told Reuters. "Maybe we don't reach it this year totally, but we feel comfortable to be ending up somewhere in that region."
Balli said the company is on track to meet its profitability goal by the end of next year, which calls for 256 Swiss francs EBIT per tonne.
(Additional reporting by Katharina Bart in Zurich; editing by Jason Neely)
By Martinne Geller
