The Cocoa Processing Company (CPC) recorded a sharp deterioration in its financial performance in 2025, with operating revenue falling by nearly half and its net loss widening to GH¢144.06 million.

According to the 2025 State Ownership Report by the State Interests and Governance Authority (SIGA), CPC’s operating revenue fell by 46.87%, from GH¢481.88 million in 2024 to GH¢256.01 million in 2025.

The report attributed the deterioration largely to a sharp contraction in revenue that was not matched by a corresponding reduction in the company’s cost base.

It said the scale of the revenue decline suggested a possible structural demand or market shock, with potential factors including the loss of cocoa-processing contracts, lower export volumes or changes in global cocoa market prices.

SIGA said management would need to identify and address the causes of the revenue decline to restore the company’s financial viability.

CPC’s total revenue, including non-operating income, also fell from GH¢482.76 million in 2024 to GH¢256.72 million in 2025.

Losses deepen

The company’s operating loss more than doubled from GH¢41.22 million in 2024 to GH¢92.65 million in 2025.

Loss before tax and net loss both rose from GH¢99.12 million in 2024 to GH¢144.06 million in 2025, representing an increase of about GH¢45 million, or 45.44%.

CPC’s operating profit margin deteriorated from negative 8.55% in 2024 to negative 36.19% in 2025.

Its net profit margin also worsened from negative 20.56% to negative 56.27%.

This means the company recorded a loss of more than 56 pesewas for every GH¢1 of revenue generated during the year.

The cost-recovery rate also fell from 92.13% to 73.48%, indicating that revenue covered a smaller proportion of CPC’s operating costs in 2025.

“The reduction in revenue without a corresponding cost adjustment also points to a structural demand/market shock,” the report stated.

Equity eroded as leverage rises.

CPC’s return on assets deteriorated from negative 1.92% in 2024 to negative 5.01% in 2025, indicating a further decline in its ability to generate returns from its assets.

Return on equity worsened even more sharply, moving from negative 32.94% to negative 127.24%.

According to SIGA, the deterioration reflected CPC’s high financial leverage, with a significant proportion of its assets financed through liabilities rather than shareholders’ funds.

The company’s total assets declined by 13.87%, from approximately GH¢2.15 billion in 2024 to GH¢1.85 billion in 2025.

Total equity, however, fell by 62.35%, from GH¢300.71 million to GH¢113.22 million.

The report said the sharper decline in equity indicated that CPC’s accumulated losses were rapidly eroding its capital base.

Total liabilities stood at GH¢1.73 billion in 2025, compared with GH¢1.85 billion a year earlier.

Consequently, the company’s debt-to-asset ratio increased from 86% to 94%, meaning liabilities financed about 94% of its assets, while equity accounted for only about 6%.

SIGA described CPC’s capital structure as highly leveraged and financially fragile, warning that the shrinking equity buffer could threaten the company’s long-term stability.

Liquidity remains weak

CPC’s current ratio improved marginally from 0.23 in 2024 to 0.25 in 2025 but remained significantly below the generally accepted benchmark of 2.0.

The ratio indicates that the company’s current assets were insufficient to cover its short-term liabilities, raising concerns about its ability to meet obligations as they fell due.

Operating cash flow also declined from GH¢61.85 million in 2024 to GH¢51.78 million.

However, the operating cash flow-to-revenue ratio improved from 0.13 to 0.20 because revenue declined at a faster rate than operating cash flow.

The company’s short-term debt coverage ratio, however, deteriorated from 4.21% to 3.64%, signalling a weaker capacity to service short-term obligations using cash generated from operations.

CPC’s processing capacity

Established in 1965, CPC processes cocoa beans into semi-finished products including cocoa liquor, butter, cake and powder.

The company also produces Golden Tree chocolate bars, chocolate-coated peanuts, drinking chocolate, chocolate spread and other confectionery products.

Its factories have a combined capacity to process about 65,000 metric tonnes of cocoa beans annually.

CPC did not report any major events, quasi-fiscal activities or climate-smart investments for the 2025 financial year.