FTN Cocoa Processors Plc, one of Nigeria’s oldest cocoa companies, has recorded zero revenue for the first time in at least 12 years, according to data compiled by BusinessDay.
The company’s latest unaudited financial statement shows that its revenue plunged by 100 percent from N62.19 million in 2022.
The cocoa processor also saw its after-tax loss widen to N8.13 billion from N431.19 million. Foreign exchange loss jumped to N7.76 billion compared to a gain of N13.30 million.
“The company has not been producing due to the lingering working capital inadequacy. This impacted on the gross margin as a result of huge fixed cost that has to be borne,” the company said in the statement.
Its cost of sales declined to N200.49 million in 2023 from N241.84 million in the previous year.
Operating expenses rose to N284.48 million from N124.74 million. Other operating income recorded a surge to N222.3 million from N6.69 million.
The firm’s total assets rose by 82.86 percent to N13.31 billion from N7.28 billion, while total liabilities increased by 106.8 percent to N18.26 billion.
Net cash used in investing activities recorded a negative of N562.83 billion from a negative of N149.9 billion. Net cash generated from financing activities surged to N9.69 billion from N196.4 million.
Cash and cash equivalents at the end of the year were N874.83 million, up from N4.95 million.
To address its working capital challenges, FTN Cocoa secured a short-term loan facility from Zedcrest Capital Limited to meet urgent needs.
“The company has a short-term loan facility from Zedcrest Capital Limited to meet some urgent working capital needs of the company,” the report said.
Additionally, it disclosed that its core investor, OH Ecosystem, was investing in the company, facilitating a factory facelift and import of spare parts in preparation for resumed operations.
“Factory facelift is ongoing alongside import of spare parts in preparation for the commencement of operating activities,” the company said in a statement.
Last June, stakeholders approved the company’s decision to obtain a convertible loan of $6.35 million from OH Ecosystems LLC, with the authorisation to provide security in favour of the Norwegian Investment Fund for Developing Countries and OH Eco.
The company is and is hereby authorised to provide security in favour of the Norwegian Investment Fund for Developing Countries and OH Eco in accordance with the terms of the relevant security documents, according to a statement.
“That pursuant to the company’s Articles of Association, the directors having recommended, be and are hereby authorised to raise such additional amount considered necessary for the business operations/working capital requirement of the company in any way thought fit and subject to the approval of relevant regulatory authorities and on such conditions/terms as the directors may determine,” the statement said.
The company issued an 18-year bond in 2008, due in 2026 to Daewoo Securities (Europe), with an option to convert the bond into ordinary shares of FTN Cocoa Processors at maturity.
The proceeds from the bond issue received in 2009 were used for the initial expansion of the company, the firm said.
