The state-owned Cocoa Processing Company Limited (CPC) continues to grapple with deepening financial challenges, posting a substantial $13.08 million loss for the nine-month period ending September 30, 2024.
This marks a 5.6% increase from the $12.38 million loss recorded in the same period last year.
The increase in losses is primarily attributed to escalating operational costs, especially in selling, distribution, and financial expenses.
According to its September 2024 Unaudited Financial Statement, CPC’s total revenue for the third quarter of 2024 declined to $31,096,542, down from $32,344,232 for the same period last year, reflecting a 3.86% decrease.
Additionally, the company’s production significantly dropped during the period under review.
Cocoa beans processed plummeted to 3,256 metric tonnes from 7,051 metric tonnes in 2023.
Semi-finished products packed fell to 2,483 metric tonnes from 5,836 metric tonnes, and confectionery products packed also declined, recording 1,429 metric tonnes from 1,699 metric tonnes.
To address its mounting challenges and steer towards profitability, CPC has secured a commitment from COCOBOD to continue supplying cocoa beans to meet its operational needs.
Crucially, COCOBOD will not demand repayments in a manner that jeopardizes CPC’s operations.
The Board of Directors has implemented several measures aimed at turning the company around and achieving profitability.
These measures include cost-cutting, investing in infrastructure and machinery, and expanding the revenue base.
In a bid to bolster its financial position, CPC’s management is in discussions with the African Export-Import Bank (Afreximbank) to secure an $86.7 million loan facility.
This loan is intended to settle outstanding amounts due to a syndicate of banks, support working capital requirements, and upgrade property, plant, and equipment to expand production capacity.
Management anticipates signing the agreement by December 2024, with the first tranche of the loan to be disbursed by March 2025