Soaring price of cocoa bean melts profits at Lir Chocolates by 85%
Lir Chocolates co-founder Connie Doody and master chocolatier Patricia Brady.
Pre-tax profits at Co Meath-based luxury chocolate maker, Lir Chocolates, plummeted by 85% to €236,714 last year, as the owners were unable to keep pace with the spiralling global price increases in the cocoa bean in 2024.
Accounts show the owners of Lir Chocolates Ltd were left counting the price of the record highs of the cocoa bean, as pre-tax profits declined by €1.34m — from €1.58m in 2023 to €236,714.
The sharp drop in profits came as revenues increased by 19%, from €34.94m to €41.7m, as the firm made efforts to pass on some of the price increases of cocoa beans to their customers.
In April of last year, the price of cocoa prices peaked globally and briefly exceeded a record of $12,000 per tonne and by late 2024, prices were around $8,177 per tonne, which was still more than a threefold increase on the 2022 price of $2,300 per tonne.
In their report, the directors for Lir Chocolates lament that “the price increases [in the cocoa bean] were so rapid and frequent that they could not be passed on to our customers quickly enough resulting in a delay in implementing selling price increases”.
The directors state the 2024 performance "was severely impacted by sharp unprecedented increase in the cocoa bean price", which is the main raw material in the production of chocolate.
They state “these prices were driven by several key factors: Adverse weather conditions leading to reduced crop yields, rising production and transportation costs exacerbated by global inflation, and fears of potential crop shortages in future seasons fuelling speculative price increases”.
They state the demand for cocoa remains strong, supporting higher prices.
The directors state that “despite ongoing challenging conditions, the company expects to return to profit levels closer to those seen in previous years, with a full recovery of chocolate prices anticipated in 2025”.
Each year at Lir Chocolates' Navan plant, Lir produces over 100m individual chocolates.
The drop in profits would have been even greater if not for Lir Chocolates recording a gain of €461,361, arising from “a supplier settlement claim”.
The company recorded operating profits of €368,485 and finance costs of €131,771, resulting in a pre-tax profit of €236,714.
Numbers employed at Lir Chocolates last year increased from 224 to 229, as staff costs increased by 8% from €8.79m to €9.5m.
The firm last year recorded post-tax profits of €193,064 after incurring a corporation tax charge of €43,650.
A breakdown of the company’s revenues show Britain is the company’s biggest market, accounting for 69% or €28.83m in revenues — while revenues in Ireland accounted for 8% or €3.44m.
The profit last year takes account of non-cash depreciation costs of €1.12m.
At the end of December last, the firm had €12.13m in shareholder funds. Accumulated profits totalled €7.2m. Cash funds increased from €1.66m to €3m.
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