Cocoa Processing Company Limited posts $13m loss amid rising costs

The Cocoa Processing Company Limited (CPC) has reported a deepening financial crisis, recording a loss of $13.08 million for the nine-month period ending September 30, 2024. 

This represents a 5.6 percent increase from the $12.38 million loss posted during the same period last year, primarily driven by escalating operational costs, including higher selling, distribution, and financial expenses.

According to its September 2024 Unaudited Financial Statement, CPC’s revenue fell to $31.1 million for the third quarter, down by 3.86 percent from $32.3 million in the previous year. 

The company’s production output has also taken a significant hit, with cocoa beans processed dropping by more than half to 3,256 metric tonnes from 7,051 metric tonnes in 2023. The production of semi-finished products fell to 2,483 metric tonnes, down from 5,836 metric tonnes, while confectionery products decreased to 1,429 metric tonnes from 1,699 metric tonnes.

To help alleviate these challenges, the Ghana Cocoa Board (COCOBOD) has pledged continued support by supplying cocoa beans essential for CPC’s operations without demanding repayments that could strain the company further. This commitment is a crucial lifeline for CPC as it seeks to stabilise its operations.

CPC’s Board of Directors has rolled out a series of strategic measures aimed at reversing its financial downturn, including cost-cutting initiatives, infrastructure and machinery investment, and plans to broaden its revenue streams. 

Additionally, CPC is in discussions with the African Export-Import Bank (Afreximbank) to secure an $86.7 million loan facility. This funding, expected to be finalised by December 2024 with the first tranche to be disbursed by March 2025, will be used to clear outstanding debts owed to a syndicate of banks, bolster working capital, and upgrade the company’s property, plant, and equipment to boost production capacity.

Despite these efforts, CPC’s share price remains low, currently trading at 0.02 pesewas on the Ghana Stock Exchange, reflecting investor concerns over the company’s financial stability.

Source : Graphic Online