Cocoa Processing Company PLC recorded a deeper loss for the six-month period ended March 31, 2026, as lower production volumes, rising input costs and higher finance expenses weighed on the company’s performance.

According to its unaudited second-quarter financial statements, the Golden Tree chocolate producer posted a loss of US$5.91 million, representing a 45.4% increase from the US$4.07 million loss recorded in the same period of 2025.

Revenue also declined by 4.8% from US$12.74 million to US$12.13 million during the period.

Cost of sales exceeds revenue

Cocoa Processing Company spent US$14.36 million on producing goods during the period, compared with revenue of US$12.13 million.

This resulted in a gross loss of US$2.23 million, significantly higher than the US$743,316 gross loss reported a year earlier.

The increase in production costs was largely driven by raw materials and packaging expenses, which rose from US$8.95 million to US$10.28 million.

Direct labour costs increased to US$419,118 from US$352,688, while production overheads rose to US$1.46 million from US$1.24 million.

The company consequently recorded an operating loss of US$3.52 million, up 47.5% from the US$2.39 million operating loss reported in March 2025.

Finance costs also increased by 12.7% to US$2.39 million, while the company recorded no finance income during the period. In comparison, finance income stood at US$441,712 in the previous year.

Cocoa processing volumes fall sharply

The company’s operational figures showed a significant decline in cocoa processing activity.

Cocoa beans processed fell by 57.6% from 2,143 metric tonnes in March 2025 to 909 metric tonnes in March 2026.

Semi-finished products packed also declined by 54.3% from 1,723 metric tonnes to 788 metric tonnes.

However, confectionery products packed increased by 30.7% from 440 metric tonnes to 575 metric tonnes.

This shift was also reflected in the company’s revenue mix. Confectionery sales rose from US$4.78 million to US$7.07 million, making the segment the company’s largest source of revenue during the period.

Revenue from cocoa butter, however, declined sharply from US$4.57 million to US$1.33 million. Cocoa liquor revenue increased from US$502,056 to US$3.43 million, while cocoa powder revenue fell from US$1.28 million to US$301,602.

Local sales rise as exports decline

Cocoa Processing Company generated US$6.86 million from local sales, representing a 51.6% increase from the US$4.52 million recorded in the comparable period.

Export sales, however, declined by 32.3% from US$7.79 million to US$5.27 million.

The figures indicate that the company became more dependent on the local market during the period, particularly through the sale of Golden Tree confectionery products.

Assets and cash position improve

Despite the wider loss, the company’s total assets increased by 15.3% from US$128.44 million to US$148.09 million.

Property, plant and equipment rose to US$116.50 million from US$102.52 million, partly supported by a US$17.41 million revaluation of the company’s assets.

Cash and bank balances increased significantly from US$3.20 million to US$14.62 million.

The company generated US$15.70 million in cash from operating activities, compared with a cash outflow of US$1.86 million in the previous period. This was mainly supported by an US$11.52 million increase in trade and other payables and a US$5.51 million reduction in inventories.

Total equity improved from a negative US$1.71 million in March 2025 to a positive US$3.24 million in March 2026. However, retained losses increased to US$180.36 million.

Liabilities remain high

Total liabilities increased by 11.3% to US$144.85 million, compared with US$130.15 million a year earlier.

Trade and other payables rose by 16.1% to US$83.21 million, while total borrowings increased to US$41.35 million from US$38.30 million.

The company’s current liabilities of US$121.63 million remained substantially higher than its current assets of US$31.60 million, indicating continued pressure on its ability to meet short-term obligations.

Cocoa Processing Company acknowledged that it remains in a net liability position and continues to face liquidity risks.

Management outlines turnaround measures

The directors said discussions were ongoing with the sector minister and commercial banks to raise additional capital to support the company’s turnaround. Management expects the discussions to be concluded by the end of the third quarter of the 2026 financial year.

The company also plans to invest in new production equipment, including an additional chocolate moulding plant, three wrapping machines and a drinking chocolate plant. It intends to rehabilitate parts of its milling section to increase chocolate production.

Other plans include introducing handcrafted and customised chocolate products, increasing the visibility of Golden Tree confectionery products and rebranding its Alltime instant drinking chocolate.

Management is also seeking to improve operational efficiency through changes to the company’s performance management system.

Cocoa Processing Company ended the period with a loss per share of US$0.0029, compared with a loss per share of US$0.0020 in March 2025.