Cocoa Processing Company Limited (CPC) has reported a net loss of $4.07 million for the second quarter ended March 31, 2025.

The unaudited financial results, released last week, show an improvement from the $6.33 million loss posted in the same period last year.

Revenue rose to $12.74 million, up from $11.66 million in Q2 2024, driven largely by increased sales of cocoa butter and confectionery products. Cocoa butter sales jumped significantly to $4.57 million, compared to $1.14 million last year, while confectionery revenue climbed to $4.78 million from $3.87 million.

However, CPC’s cost of sales remained a major concern, amounting to $13.49 million, though slightly lower than the $14.11 million recorded a year ago.

This contributed to a gross loss of $743,315 – a notable improvement from the $2.45 million loss in the same period last year, suggesting early signs of better cost controls.

Operational challenges persisted. Although selling and distribution expenses fell to $189,486 from $295,153, administrative costs held firm at $1.48 million. Finance costs surged to $2.12 million, driven by high interest on loans and borrowings, which deepened the company’s net loss.

CPC’s liquidity also came under pressure, with cash and cash equivalents dropping to $3.2 million from $4.35 million at the beginning of the quarter. The company attributed the cash outflow primarily to operational expenses and ongoing loan repayments.

Looking ahead, CPC disclosed that it is in advanced talks with the African Export-Import Bank (Afreximbank) for an $86.7 million loan facility to restructure its debts and fund capacity expansion. Management anticipates that the agreement will be finalised by June, with disbursement starting in September 2025.

In a bid to reverse its financial fortunes, the company has outlined a turnaround strategy. This includes a bio-waste energy project expected to cut utility costs by up to 40 per cent, as well as retooling its confectionery factory to increase production capacity. CPC also plans to diversify its revenue base through new product lines, such as handcrafted chocolates and rebranded instant drinking chocolate.

Despite these recovery efforts, CPC continues to face considerable financial uncertainty. Its net assets per share fell into negative territory at $0.0008, down from a positive $0.0018 in 2024. The auditors raised material concerns about the company’s ability to continue as a going concern, citing its net liability position and dependence on external funding.

Nonetheless, CPC’s directors remain optimistic. They cited ongoing support from COCOBOD for cocoa bean supplies and potential collateral arrangements with the Cocoa Marketing Company as stabilising factors.