FTN Cocoa Processors Plc, a company based in Nigeria that produces cocoa products, has experienced a decrease in revenue for the first time in a decade.
In the second quarter of 2023, the company’s revenue dropped zero, marking a 100 percent decline compared to the N16.97 million it earned in the same quarter of 2022.
According to the company’s financial statement, the company did not generate any revenue from local sales or export in the second quarter of 2023.
The company noted that the lack of working capital hindered production, resulting in a substantial burden of fixed costs that affected the gross margin.
“The company has not been producing due to the lingering working capital inadequacy. This impacted the gross margin as a result of huge fixed costs that had to be borne,” the company stated.
The company’s main activities involve processing cocoa beans and palm kernels into various products such as Cocoa Cake, Liquor, Butter, Powder, Palm Kernel Oil, and Palm Kernel cake. It exports cocoa cake, liquor, and butter.
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The cost of sales decreased by 18.37 percent to N92.28 million in the second quarter of 2023, down from N113.05 million in the same quarter of the previous year.
Nevertheless, the company experienced an exchange gain of N1.77 million in the reviewed period, compared to no gain in the same quarter of 2022.
Operating expenses also declined by 18.43 percent to N39.79 million in the second quarter of 2023, down from N48.78 million in the same quarter of 2022.
In terms of finance, there was no income generated in the second quarter of 2023, compared to N7.03 million in the same quarter of 2022. However, the company incurred a finance cost of N62.26 million in the first quarter of 2023 due to accumulated interest on borrowings.
The company suffered a loss in profit amounting to N192.39 million in the second quarter of 2023, an increase from the N169.77 million loss recorded in the same quarter of 2022.
Notably, no income tax was recorded.
The loss per share for the second quarter of 2023 was 5 kobo, compared to a loss of 8 kobo per share in the same quarter of 2022.
Cash flows from operating activities resulted in a loss of N6.06 million, while net cash used in investing activities incurred a loss of N62.26 million. On the other hand, net cash generated from financing activities amounted to a profit of N71.42 million in the second quarter of 2023.
At the end of the period, the company’s cash and cash equivalents stood at N8.04 million.
