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11.02.2008 Business & Finance

Good News For PBC Shareholders

By Daily Guide
Good News For PBC Shareholders
11.02.2008 LISTEN

Despite a 21.5 percent reduction in its turnover for the last financial year, from GH¢248.662 million to GH¢195.113 million, Produce Buying Company (PBC) has seen some 8 percent increase in its turnover for the first quarter of the current financial year.

Alternatively, its profit before tax also increased by 8.5 percent from GH¢1.853 million to GH¢2.193 million.

In addition, almost all the financial ratios saw improvement which was mainly due to the acquisition of 100 cargo trucks and 34 articulator trucks, to GH¢8.5 million to purchase secondary cocoa, a function which was largely sub-contracted.

The move, according to the financial statements, helped to diversify the company's revenue base through increased freight earnings.

At the first 'facts behind the figures' programme on the floor of the Ghana Stock Exchange, Managing Director of the company, Osei Boakye said despite the challenges in the last financial year, PBC purchased 186,051 tonnes representing 31 percent of the market share.

He said as market leaders, PBC will continue to provide high quality service and motivation to its cherished farmers and adopt healthy competitive prices in line with the role and regulations of the market.

In the financial report, the company said it was going to fully exploit the favourable macroeconomic environment of falling interest rates, and stable local currency among other indicators to access cheaper sources of funds to complement seed funding from the Ghana Cocoa Board.

During the last two years, PBC, the leading licensed dealing member was plagued by some difficulties such as unfavorable weather conditions in cocoa growing areas which led to a significant decrease in volume of cocoa purchased.

Consequently, cost of sales also decreased by 22 percent from GH¢222.530 million to GH¢173.222 million resulting in a gross profit of GH¢21.890 million compared to last financial year's gross profit of GH¢26.13 million.

Notwithstanding that, direct operating expenses and finance cost decreased by 31.8 percent and 32 percent respectively.

The company also posted a net profit before tax of GH¢713,605 from the previous loss of GH¢1.261 million.

The cumulative effect of the modest gain in profitability during the year resulted in the increase in shareholders' fund by 10.5 percent from GH¢4.274 million to GH¢4.725 million.

Commenting on the financial ratios, Kofi Yamoah, M.D of the GSE urged government to offload more of its holdings in PBC to interested investors.

This, he believed, would boost investor activities in shares of PBC on the capital market, culminating in increase in the share price.

Meanwhile, first quarter result of PBC indicates that the company's turnover has increased by some 8 percent.

Profit before tax also increased by 8.5 percent from GH¢1.853 million to GH¢2.193 million

By Charles Nixon Yeboah

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