Produce Buying Company (PBC) failed to pay dividend to shareholders for the second conservative financial year due largely to the negative income surplus account arising out of the losses incurred in earlier years.

The Board in 2013/2014 and 2014/2015 financial year failed to pay dividends to its shareholders, which raised various concerns among the company’s shareholders.

“The Board again could not recommend the payment of any dividend this year. With a negative income surplus account arising out of the losses incurred in earlier years, it has become necessary to retain the marginal profit made to enable consideration for dividend payments upon a continued and improved performance in the subsequent years,” said the company at its 15th Annual General Meeting held in Accra.

The company’s Board Chairman, Captain Kwadjo Adunkwa Buta (RTD) addressing shareholders explained that PBC Limited recorded a modest net profit of GH¢6.27 million for the 2014/2015 financial year as compared to a net loss of GH¢25.31 million recorded the previous year and however, could not recommend the payment of any dividend as was the case in the 2013/2014 financial year.

He explained that the positive expectations arising out of the improved margins failed to materialize as national output of the produce unexpectedly grew leaner and leaner throughout the season.

Capt. Buta indicated that the national targets originally fixed at 900,000 tonnes had to be revised downwards as this called for the reduction of the Company’s planned purchases downwards from 310,812 tonnes to 250,000 tonnes.

Ultimately, the national output for the year under review was 740,254 tonnes, a 17.5 percent decrease from the previous year’s output of 896,917 tonnes while PBC Limited purchased a total of 230,989 tonnes, a decrease of 21.5 percent from the previous year’s purchases of 294,261 tonnes, he stated.

Mr. Maxwell Kojo Atta-Krah, the Chief Executive Officer of PBC, attributed the company’s performance to the unfavourable weather conditions that significantly affected the national cocoa output and reduced the quantity of cocoa purchased and delivered by the company in the year under review.

He said the company’s continued reliance on borrowings from the market to supplement funds for purchases presented it with a cost outlay too heavy to bear and that there is the need for supplementary funds beyond that from the traditional Ghana Cocoa Board (COCOBOD) source continued to place the operations of the company on excessive short term borrowings at high interest charges.

“In the year under review, the company spent 51.2 per cent of its gross operational earning in servicing finance cost,” Mr. Atta-Krah said.

He said the general unfavourable economic condition caused by excessive increases in costs of all major operational inputs and logistics was another factor that hindered the smooth operations of the company.

He said the raising of the equity capital for the company through a ‘Rights Issue’ or ‘Private Placement’ which had been on the drawing board for a number of years should be pursued to its logical conclusion as the Board of Directors continued to engage the major shareholders on the issue.

Mr. Atta-Krah indicated that the total revenue earned of GH¢1.471 billion arose out of the three core activities of the company, namely cocoa operations with revenue of GH¢1.413 billion, sheanut activities, GH¢35.660 million, and haulage services, GH¢7.986 million.

He said the revenue for cocoa operations increased from GH¢1.115 billion, an increase of 26.6 per cent due mainly to the increase in producer price of cocoa purchased from GH¢5, 600.00 per tonnes to GH¢6, 800.00 per tonne in the year under the review.

“With a decrease of 17.5 per cent in national cocoa purchases from 896,917 tonnes in 2013/14 to 740,254 tonnes in 2014/15, the company’s purchases similarly decreased by 21.5 per cent from 294,261 tonnes in 2013/14 to 230,989 tonnes in 2014/2015,” he said.

He explained that the total expenses, excluding financing cost, increased by 34 per cent from GH¢84.263 to GH¢113.751 million, thus the company recorded an operating profit before financing cost of GH¢92.662 million as compared to the previous year’s figure of GH¢34.726 million, an increase of about 167 per cent.

On the outlook for the new financial year, Mr Atta-Krah said the Board of Directors and management would continue to dialogue with the major shareholders to ensure that all outstanding issues relating to Equity Capitalisation were resolved.

He said they would also continue to put in place the needed strategies to improve its operational capacities and efficiency to increase its market share and volume purchases to enhance its revenue and boost its profits levels in the years ahead.

“Again, the company would put in place appropriate strategies to monitor and effectively and efficiently manage the various investments being undertaken to ensure maximum return”, he said.