PBC holds AGM, explains reasons for loss in first quarter

Accra, Feb. 21, GNA - The Produce Buying Company (PBC) said on Friday the poor performance it registered in the first quarter of the financial year of October 2004 to September 2005 was the result of its inability to discharge cocoa it purchased for sale in that period.

Mr Paul Owusu, Deputy Managing Director (Finance and Administration), told the GNA at PBC's Fourth Annual General Meeting (AGM) in Accra that the Company could not deliver some of its stocks of cocoa purchased to COCOBOD at the beginning of the first quarter because of the purple bean problem.

He said, however, that the stocks of cocoa had since been delivered to COCOBOD but the transaction could not be captured in the first quarter result issued to the Ghana Stock Exchange (GSE) this month because the result was prepared before the sale was effected.

He expressed optimism that the Company would meet its targets by increasing purchases on the local front for export in order to make more profits.

PBC released its first quarter results for the accounting year October 2004 to September 2005 in which it made a loss of 7.4 billion cedis in net profit after tax.

However, its balance of 35.8 billion cedis carried over to October 1 added to the loss brought the net profit to 28.3 billion cedis for the first quarter of the present financial year.

At the AGM, Nana Timothy Aye Kusi, Chairman, gave the Company's performance for the last financial year ending September 30, 2004 during which it purchased for sale 33 per cent of total cocoa production of the country.

Ghana produced an all time record of 739,894 tonnes of cocoa during the last cocoa season out of which PBC purchased 244,597 tonnes. The resultant net profit after tax was 38 billion cedis and a correspondent 42 per cent growth in shareholders equity of 85 billion cedis from 60 billion cedis.

Total dividend stood at 11.9 billion cedis out of which the Company paid a dividend per share of 25 cedis, 66 per cent up from the previous year.

Nana Kusi noted that the implementation of the three-year medium term plan of the Company succeeded saying, "our medium term corporate plan has succeeded in putting our company on the path of sustained profitability".

He said efforts would be made to boost freight earnings from secondary evacuation by increasing the share of cocoa evacuated by articulated trucks to diversify the revenue base.

Nana Kusi told the shareholders that the Company's achievement so far had been recognised resulting in it being adjudged the second best and the leading trading Company, respectively, during the prestigious Ghana Club 100 Awards.

Mr Emmanuel Owusu Boakye, Managing Director, said turnover increased by 44 per cent from 1.595 trillion cedis to 2.296 trillion cedis due to increase in volume of cocoa purchased, while total expenses amounted to 213 billion cedis up from 166 billion cedis.

Mr Joseph Abakah Biney, Mr Kwesi Opoku Addo, Mr Kwesi Amoako Amoabeng were some of the shareholders, who congratulated the Company for the achievements so far but asked for more dividend or a rights issue to increase their dividends.

They also questioned why the Directors could not give more information on certain properties and title deeds to the Auditors. They also questioned why they could not purchase more cocoa for sale and why overdraft was increasing.

In the Auditors Report, Pannell Kerr Forster, Chartered Accountants, said: "We have not had sight of the title deeds of the sheds and buildings as stated in the Company's books to establish the Company's ownership of these assets."

Mr Anthony Osei Boakye, Deputy Managing Director (Operations) and Mr Owusu explained that some of the properties thought to belong to PBC rather belonged to COCOBOD because the Government ceded those properties to them.

They said regarding title deeds, the Government gave lands to the Company as far back as the First Republic and, therefore, most of those properties did not have documents.

PBC is trying to prepare documents for the properties and has contracted a consultant. However, work is delaying because some new chiefs are demanding high fees in compensation.

The two Deputy Directors also explained that PBC was competing with 26 other licensed buying companies some of which were foreign-owned and had ready funds to purchase cocoa.

PBC lacked funds and, therefore, needed to contract overdraft in order to purchase more cocoa.

Nana Kusi and Mrs Angelina Baiden-Amissah, an MP, were re-elected Directors to serve on the Board.