FTN Cocoa facing imminent insolvency

FTN Cocoa released its 2020 full-year earnings revealing a loss after tax of N664 million (2019: N797.1 million). Earning per share for the period under review printed at 30kobo per share (2019: 36 kobo).

Key Highlights

  • The company is facing imminent insolvency after losses widened its negative equity to N1.1 billion up from N499.2 billion.
  • This means the company status as a going concern is threatened as it could close shop any time soon.
  • The company also acknowledged this threat explaining that “the company incurred an accumulated loss of N4,705.585 million as at the year ended 31 December 2020. At that date, the company had a negative shareholders fund of N1,163.286 million. This condition gives rise to a material uncertainty which may cast doubt on the company‟s ability to continue as a going concern.”
  • It then assured of a fundraising exercise that could resuscitate the company. “However there is an ongoing capital restructure
    programme which will bring in substantial foreign capital inflow to reposition the company.”
  • The company has a cash balance of just N48. 4 million

What FTN Cocoa does: The company is into the processing of cocoa beans and palm kernel into Cocoa Cake, Liquor, Butter, Powder, Palm Kernel Oil, and Palm Kernel cake. Cocoa Cake, Liquor, and butter are exported while Cocoa powder, Palm Kernel oil and Palm Kernel cakes are marketed locally to manufacturing companies.

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