Story by Kayode Tokede
FTN Cocoa Processors Plc has reported a loss of N569.37million in its 2018 financial year compared to N762.4 million reported I prior year results submitted to the Nigeria Stock Exchange (NSE).
The Cocoa processing company loss before taxation grew by 25 per cent to N569.4million in 2018 financial year from N762.42million reported in 2017.
Despite reporting improved revenue in the year under review, the company hike in cost of sales impacted negatively on profits
The company reported 636 per cent increase in revenue to N602.1million in 2018 as against N81.8million reported in 2017 while cost of sales rose to N885.86million in 2018 from N332.79 million reported in 2017.
Key factors contributing the FTN Cocoa cost of sales include change in inventories of finished goods raw materials that hits N526.17million in 2018 from N54.78 million in 2017 while cost on diesel, electricity among others moved to N68.21million in 2018 from N12.12 million in 2017.
External auditor, Baker Tilly Nigeria in a report stated that the company sustained a gross loss of N284 million compared to a gross loss of N251 million in the preceding year.
“This was attributed to high cost of production and not able to produce at optimum level due to inadequate working capital to procure raw materials.”
“The Board mentioned that the Core investor that assisted in liquidation of bank loan will be providing working capital in due course and company will be able to procure raw materials and produce at optimum level. Bank loan the company has discharged the United Bank for Africa loan obligation and paid Union Bank loan,” the external auditors explained.
From the balance sheet position, the company’s total assets remained flat at N4.8billion while total liabilities rose by 14 per cent to N .75billion in 2018 from N4.18 billion reported in 2017.
In addition, total equity dropped by 89 per cent to N67.78 million in 2018 as against N637.15 million reported in 2017.