The financial struggles of the state-owned Cocoa Processing Company Limited (CPC) have intensified, with the firm reporting a loss of $9,568,898 in the first half of 2024, compared to $9,155,700 during the same period last year, marking a 4.5% increase in losses.
The rise in losses is mainly due to increasing operational costs, particularly in selling, distribution, and financial expenses.
According to its 2024 Unaudited Financial Statement, CPC’s total revenue for the first half of 2024 decreased to $22,198,703, down from $24,184,099 in the first half of 2023, reflecting an 8.2% decline.
The company’s production also saw a significant drop during the period under review. The amount of cocoa beans processed fell to 2,886 metric tonnes from 6,614 metric tonnes in 2023. Semi-finished products packed decreased to 2,239 metric tonnes from 5,425 metric tonnes, and confectionery products packed also declined to 1,049 metric tonnes from 1,418 metric tonnes.
To address these mounting challenges and move towards profitability, CPC has secured a commitment from COCOBOD to continue supplying cocoa beans to meet its operational needs without demanding repayments that would jeopardize CPC’s operations.
The Board of Directors has implemented several measures to turn the company around and achieve profitability. These measures include cost-cutting, investing in infrastructure and machinery, and expanding the revenue base.
In an effort to strengthen 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 expects to sign the agreement by December 2024, with the first tranche of the loan to be disbursed by March 2025.