Monday, April 2, 2012

PBC considers offshore facility

Produce Buying Company (PBC), the country’s largest-buyer of cocoa beans, says it is considering accessing offshore facilities to reduce the cost of raising capital to finance its operations.

“The board and management have put in place a number of measures, including accessing offshore facilities at relatively lower cost, to supplement local funding sources to bring our finance cost to an acceptable level.

“The huge sums of money involved in our operations tend to expose the company to a number of operational and financial risks such as interest-rate risk, as well as market and security risks.

“Finance costs, which constituted about 25.6% of gross operational earnings [in 2011], continue to pose a challenge to the company’s financial performance,” Dr. John Frank Abu, Board Chairman of the company, said at its annual general meeting in Accra.

“PBC’s cost of sales grew by 109.6% from GH¢556.67million in the previous year to GH¢1.17billion, due mainly to the increase in producer price and jump in the quantity of cocoa purchased,” he said.

Making a presentation, Dr. Abu said the company increased its cocoa tonnage purchases by 56% from 238,967 tonnes in 2009/10 to 374,858 tonnes during the year 2010/11, and achieved a market share of 37%.

This development impacted on the company’s revenue, which rose from GH¢632.9million to GH¢1.3billion.

The significant increase of 105.7% was mainly due to the increase in the quantity of cocoa purchased, the producer-price paid to farmers, and freight earnings from secondary evacuation activities.

In 2011, the company achieved a profit after tax of GH¢27.65million, against GH¢14.1million in 2010. The balance sheet also showed a strong growth and resilient financial position as shareholder’s equity rose by 100.5% from GH¢23.63million to GH¢47.4million.

The company’s total assets grew by 62% from GH¢169million to GH¢274.3million. This growth was mainly led by inventories, trade and other receivables as well as property, plant and equipment which respectively grew by 21%, 87% and 26%.

Basic earnings per share increased by 95.9% from GH¢0.0294 in 2010 to GH¢0.0576 in 2011. The company’s net worth improved from GH¢23.62million in 2009/10 to GH¢47.37million in the year under review, representing 100.5% growth. This was largely due to improved profitability and a sound retention policy, Dr. Abu said.

“The company looks into the future with confidence and optimism, and hopes to achieve more successes in its operational and financial performance. In the coming year, we intend to improve our operational activities, increase supervision of field staff and increase our storage facilities to help bolster our market share, become more competitive and continue to be the market leader in the industry.”

Produce Buying Company’s main business is to buy, collect, store, transport and deal in cocoa, coffee and shea nuts produced in the country on behalf of the Ghana Cocoa Board.

PBC was ranked number-one in 2010 in the Ghana Club 100 rankings, up from the 34th position in the previous year.

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