Cocoa Processing Company Limited Reports $13M Loss Amid Rising Costs and Declining Production

The Cocoa Processing Company Limited (CPC) has reported a $13.08 million loss for the nine-month period ending September 30, 2024, underscoring the company’s deepening financial struggles. This marks a 5.6% increase from the $12.38 million loss recorded in the same period last year, driven by rising operational costs, including higher expenses in selling, distribution, and finance.

According to CPC’s September 2024 Unaudited Financial Statement, revenue declined by 3.86% to $31.1 million for the third quarter, down from $32.3 million in the previous year. Production has also taken a substantial hit, with cocoa bean processing dropping by more than half to 3,256 metric tonnes, compared to 7,051 metric tonnes in 2023. The output of semi-finished products fell to 2,483 metric tonnes from 5,836 metric tonnes, while confectionery products production decreased from 1,699 metric tonnes to 1,429 metric tonnes.

COCOBOD’s Support and Strategic Plans

In response to the challenges CPC faces, the Ghana Cocoa Board (COCOBOD) has committed to supplying cocoa beans necessary for CPC’s production, without immediate repayment requirements. This support aims to relieve CPC’s financial strain as it works to stabilize operations.

CPC’s Board of Directors has implemented several strategic measures to turn around the company’s financial position, including cost-cutting initiatives, investment in infrastructure and machinery, and plans to diversify revenue streams. Additionally, the company is negotiating an $86.7 million loan facility with the African Export-Import Bank (Afreximbank). The loan, expected to be approved by December 2024 with initial disbursements by March 2025, will help CPC clear outstanding bank debts, boost working capital, and upgrade its property, plant, and equipment to enhance production capacity.

Market Impact and Investor Concerns

Despite these efforts, investor confidence remains low, with CPC’s share price currently trading at 0.02 pesewas on the Ghana Stock Exchange, reflecting ongoing concerns about the company’s financial outlook.

As CPC seeks to overcome these hurdles, the support from COCOBOD and upcoming financial interventions are critical to its efforts in reversing losses and strengthening its position within Ghana’s cocoa industry.