FTN Cocoa Processors Plc has made commendable progress in trimming its losses for the half-year ended June 2025, reducing its pre-tax loss by 89% from ₦10.5 billion to ₦1.1 billion. Despite this, the company remains in negative territory, with a fragile equity position, rising liabilities, and declining asset base—all of which suggest that recovery is still a work in progress.
Key Strengths
- Strong Revenue Growth: Revenue rose by 184% year-on-year to ₦1.81 billion, indicating improved sales activity and possibly a return to operational capacity.
- Reduced Losses: Loss before tax narrowed significantly from ₦10.5 billion to ₦1.1 billion, demonstrating the impact of cost-cutting or increased efficiency.
- Improved Earnings Per Share: Loss per share improved from ₦2.69 to ₦0.29, reflecting a smaller drain on shareholder value.
Key Weaknesses
- Negative Equity: Shareholders’ equity has nearly been wiped out, down 96% from ₦3.44 billion to ₦126 million, raising serious concerns about solvency.
- Rising Liabilities: Total liabilities surged by 14% to ₦20.1 billion, increasing the company’s financial risk and weakening its balance sheet further.
- Declining Asset Base: Total assets dropped by nearly 4%, with a 2.2% decline in property, plant, and equipment, suggesting limited reinvestment or asset erosion.
- No Tax Payment: The absence of taxation implies continued unprofitability and no taxable earnings.
Outlook
While the top-line growth and reduced losses offer a glimmer of hope, FTN Cocoa remains structurally weak. A single positive half-year does not erase years of operational underperformance and capital erosion. The company must stabilize its financial footing, reduce debt, and return to profitability to be considered a viable long-term investment.
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