The Cocoa Processing Company Limited, producer’s of the Golden Tree chocolate, is grappling with substantial financial and operational setbacks with unaudited financial results for the year ending September 30, 2024, revealing a declining revenue, mounting losses, and a steep drop in production output.
Despite its significant presence in the country’s cocoa sector, the company’s turnover slipped from US$32.3 million in 2023 to US$31.1 million in 2024. This represents a 4% drop in revenue.
This decline may seem modest on the surface, but the underlying numbers paint a much bleaker picture. Its operating losses swelled from US$7.7 million in the previous year to a worrying US$8.8 million, as the company struggled with rising costs and reduced efficiency.
The net loss for the year stands at a staggering US$13.1 million, up from US$12.3 million in 2023, reflecting a deteriorating financial position.
The company’s assets also took a hit, shrinking from US$131.4 million in 2023 to US$124.4 million this year. Such a decline in asset value could signal a reduction in the company’s operational capacity or a lack of reinvestment in infrastructure.
More troubling is the erosion of shareholder value, with net assets per share turning negative at -US$0.0016, down from US$0.0050 the previous year. This indicates that the company’s liabilities now outweigh its assets, placing further strain on its financial health.
The volume of cocoa beans processed plummeted from 7,051 metric tons (MT) in 2023 to just 3,256 MT in 2024, representing a significant 54% drop. This sharp decline has cascaded down to other production lines as well.
The output of semi-finished products dropped from 5,836 MT to 2,483 MT, while confectionery products fell from 1,699 MT to 1,429 MT. These drops in production not only reduce the company’s ability to generate revenue but also limit its potential to meet market demand and fulfill export obligations.
The financial strain is further underscored by the company’s earnings per share (EPS), which declined from -US$0.0061 in 2023 to -US$0.0064 in 2024. This negative EPS signals that the company continues to operate at a loss, affecting the value of shareholders’ investments.
With no dividend payouts on the horizon, as indicated by the steady number of shares ranking for a dividend at over 2 billion, the future appears uncertain for shareholders and stakeholders alike.
