FTN Cocoa Blames Inadequate Working Capital for N664m FY20 Loss

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In the 2020 financial year, FTN Cocoa Processors Plc recorded a loss after tax of N664.1 million in contrast to the loss after tax of N601.3 million it recorded in the 2019 reporting year.

According to the firm, this loss was caused by the “lack of adequate working capital to produce at optimal level coupled with heavy finance cost.”

In the past weeks, shares of FTN Cocoa have melted the hearts of investors, who started to develop feelings for the company’s equities after a suspension placed on the firm by the Nigerian Stock Exchange (NSE) was lifted.

The exchange sanctioned FTN Cocoa on September 1, 2020, for failing to file its results at the appropriate time and after the board did the needful and the embargo was removed on November 27, 2020, its equity price began to rise at the market.

FTN Cocoa, which was at 26 kobo when the suspension was placed by the NSE, rose as high as 89 kobo in December before falling to 55 kobo by end of January 2021 and closed at 53 kobo on Tuesday, February 2, 2021.
The revenue generated by FTN Cocoa in the year significantly went down to N235.2 million from N672.2 million and this was mainly due to a decline in both local and export sales.

Though the cost of sales reduced to N532.4 million from N1.2 billion in 2019, the firm ended the year with a gross loss of N297.2 million in contrast to N476.1 million gross loss of the preceding year.

However, the operating expenses of the organisation increased in the period under consideration to N225.1 million from N167.8 million as a result of the cost incurred on office and general expenses; legal and professional fee; and AGM costs.

At the close of transactions for the year, FTN Cocoa reported an operating loss of N486.9 million, lower than the operating loss of N512.0 million of the previous year.

On the balance sheet, the total assets of FTN Cocoa stood at N4.6 billion in FY 2020 versus N4.7 billion in FY 2019, while the total liabilities stood at N5.8 billion last year as against N5.2 billion a year earlier and this was caused by an increase in borrowings.

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