PBC Limited continues poor performance with GHC139m loss
PBC Limited continued its nosedive for the fourth consecutive year, recording GHC139.3m losses in 2019.
With a total accumulated debt of GHC 276.3million from previous years, the company’s balance in its total surplus account at the end of September 31, 2019, was a debt of GHC415.6million.
The decline started after a GHC 6.2million profit in 2015.
PBC recorded losses of GHC 16 million in 2016 which increased to 22.4million losses in 2017.
In 2019, the company got less revenue but implemented significant cost-cutting measures that improved on the 2018 loss of 172million.
However, a huge cost of operations and high interest on loans products ensured that the company was far away from profits.
Revenue dipped by 37% to GHC1.1billion just as the cost of sales by 36% to GHC 1billion as well as the gross profit of GHC105 million which was 72% short of the 2018 figure.
Management policies resulted in cuts of Direct Operating Expenses by 79 % to GHC 14.2million; General and Administrative Expenses by 40.6% to GHC88.6million and Net Finance Expenses by 2% to GHC148million.
The result was slightly better than in 2018 yet the company is far away from any surplus cash that would deliver a dividend to shareholders.
This was contained in the audited financial report of the PBC for the years ending September 30, 2019, awaiting the 2020 report.
The company managed to achieve a current ratio of 1.05 from the non-liquid status in 2018.
However, total liabilities exceed total assets with a debt/asset ratio of 1.34.
Challenges of mismanagement and allegations of corruption
PBC which is one of the biggest dealers in cocoa, shea nut and other cash crops in the West Africa sub-region, has been struggling for years.
The company has been saddled with huge debts and operational challenges which resulted in the Ghana Stock Exchange (GSE) suspending it in 2019.
In a release, the GSE said PBC failed and breached listing regulations and failed to publish financial results for the 2018 financial year and redeem a debt instrument issued earlier.
The financial year of PBC, which was previously called Produce Buying Company, ended in September 2018.
The GSE’s notice to suspend the company added that “PBC has also failed to redeem the Tranche P4 of its note program, which matured on December 6, 2018.
Part VI of the GSE Listing Rules outlines that a listed company shall comply with the continuing listing obligations and disclosure policy outlined in the Rules.
The prescribed sanctions for failing to abide by that regulation are specified in Rules 13(4)(c) and 13(4)(e) of the Listing Rules.
They empower the GSE to “suspend listing or compulsorily de-list securities where the company has failed to comply, or is unable, or unwilling to comply for any reason whatsoever with the Exchange’s requirements on continuing listing obligations and also where the company has failed to comply with its Listing Agreement, or other agreements with the Exchange, or has failed to comply with the Exchange’s Rules and disclosure policy as set out in Parts VI and VII of the Rules.”
Prior to the suspension, staff of the company had embarked on a series of protests against their Managing Director, Kofi Owusu-Boateng, and the Board Chairman, Charles B. Ntim, over allegations of mismanagement.
The staff picketed on August 6 at the firm’s head office in Accra to demand a change in management.
The company was later reinstated.
PBC, which is the biggest cocoa buyer, is majority-owned by the Social Security and National Insurance Trust (SSNIT) and the Government of Ghana, through the Ministry of Finance.
The two lead shareholders own almost 75 per cent of the company, which recently diversified from its core business of cocoa buying into real estate and shea nut processing through the establishment of the Golden Bean Hotel in Kumasi and the Shea Factory in Buipe.
In 2020, the Commission on Human Rights and Administrative Justice (CHRAJ) ordered a former General Manager of the Produce Buying Company (PBC) to refund some GHC 1.5m taken from the company’s coffers in 2018.
Mr John Benam Jabaah, a former Deputy Northern Regional Minister, cashed the money into his personal account for the purchase of shea nuts.
The shea nuts have not been delivered from the source in Burkina Faso, forcing a journalist, Nana Kwadwo Jantuah, to petition CHRAJ.
In a response signed by the Ashanti Regional Director of CHRAJ, Mrs Cynthia Martinson, the two-page document indicated that Mr Jabaah should ensure the money was returned.
“Please take notice that you have already admitted that the cheque, as well as the requisition, was made in your name. We, therefore, advised that you take appropriate steps to retrieve the said money from the supplies to forestall loss of money to Produce Buying Company (PBC),” the document stated.
Mr Jantuah’s petition also requested an audit conducted into the purchase of some equipment valued at $576,000 which later increased to $1.6 million.
PBC recorded the highest losses in the last four years in 2018.