A bold restructuring exercise, cost cutting measures and systems instituted to prevent the occurence of the leaf miner disease helped Benso Oil Palm Plantation (BOPP) to sustain its profitability recorded in 2006.
Although the volume of production declined marginally, the company's produce benefited from a worldwide price hike that helped it to see an operating profit increase by 44 per cent from GH¢1.23 million in 2006 to GH¢1.8 million in 2007.
“We are doing everything we can now to make sure the volumes are high to offset any price reductions,” the Managing Director of the BOPP, Mr Neneyo Mate-Kole, said in Accra yesterday when the company took its turn at the Facts Behind the Figures on the Ghana Stock Exchange (GSE).
The company which will hold its annual general meeting next week, used the occasion to give detailed explanations to its operational results.
The BOPP Managing Director said the company was embarking on a number of cost cutting measures, such as increasing its internal electricity generation from 60 per cent to over 100 per cent so as to become a net producer of power.
BOPP uses waste materials — fibre and shells — of the oil palm to generate electricity and is currently doing 625kva of power for internal comsumption.
The company hopes to increase the generation to more than 1,000 kva or one megawatt of power and save about GH¢20,000 paid monthly on electricity.
Mr Mate-Kole said the company would also mix the Empty Fruit Brunches (EFB) with the Palm Oil Mill Effluent (POME) and apply it on the plantation to increase yields significantly.
He said that would also contribute to cutting about one-third of the fertilizer needs of the plantation, currently standing at about GH¢1 million, so as to achieve the double effect of increasing yields and lowering costs.
Also, BOPP would assist its outgrower farmers to improve yields and properly maintain their farms, Mr Mate-Kole stated, adding that the memorandum of understanding and the good raport between the company and the farmers would facilitate their continued sale of fruits to BOPP.
The company processed a total of 84,409 tonnes of fresh fruit bunches last year, a three per cent dip from the previous figure.
The company attributed the decline to bad weather conditions and said moisture conservation pits were being constructed to forestall the situation.
“A total of 75,000 cubic metres of closed ended trenches and 1,970 cubic metres of moisture conservation pits have been constructed in the field,” the managing director explained.
BOPP, however, increased its revenue from GH¢9 million in 2006 to GH¢13.115 million for last year.
But its increased costs of GH¢10.55 million from 2006 figure of GH¢7.73 million, accounted for a low profit after tax of GH¢745,000, down from the 2006 figure of GH¢1.15 million.
The Finance Director of the company, Mr Issah Adam, said the company had a strong balance sheet, as it had no loans but financed its operations with internally generated funds.
He explained that a reduction in the profit after tax figure was due to the new reporting regime, the International Financial Reporting Standards (IFRS), which showed a reduction in the profit by 35 per cent.
BOPP has proposed a 70 per cent dividend payout, amounting to GH¢521,500.
— Story by Samuel Doe Ablordeppey