CPC underperforming

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On the Ghana Stock Exchange

Cocoa Processing Company (CPC) continues to under-perform on the local bourse. The dwindling company fundamentals contribute to the poor performance of the stock on the market. CPC has been heavily plagued by high interest costs from borrowings and poor management of the firm operations.

The recent financial performance report [i.e. Q1-2017] indicates an 18.46% losses recorded from the company’s operations.

Overburdened by high debt levels, CPC has become ineffective in its operations. Total turnover recorded in Q1-2017 fell by 19.07%; from GHS 7,109,121 in Q1-2017 to GHS 5,753,083. Additionally, Finance cost for the first three months of 2017 increased marginally by 2.32%; from GHS 3,434,485 in Q1-2016 to GHS 4,068,464. The listed cocoa processing company recorded after tax losses of GHS 5,984,452 representing an increase in losses of 12.77% compared to Q1-2016.

Recent calls to delist the company from the local bourse may not be a proper solution to making CPC profitable. GN Analysts recommend that the company engages with a strategic partner who will invest funds to run profitable operations from the company or share recapitalisation will be an effective way for the company to raise additional capital to cover existing debt obligations.

CPC currently records YTD capital gains of 0.00%, after the stock fell from GHS 0.03 to GHS 0.02 in HY-2017. GN Analysts recommend a HOLD on the stock.

 

Trading activity on the bourse ended with 2 gainers [HFC and SPL] yesterday. GCB shares topped the trading chart in terms of volume as 222,600 shares worth GHS 1,157,520.00 changed hands. Returns on the Composite and Financial Stock Index pegged at 20.62% and 22.90% respectively.

 

On the Ghana Alternative Market GAX)

Trading activity on the Alternative Market was hushed as no shares changed hands on the market.

HORDS currently lead record capital gains on the GAX, appreciating by 25% from 2016 year open.

 

On the Currency market

The Cedi LOST marginally to the Dollar and British pound but GAINED to the Euro on the inter-bank market yesterday.

The local currency exchanged at a mid-rate of GHS 4.3585 to the USD, GHS 5.6362 to the GBP and GHS 4.9702 to the EURO.

The GCFM Cedi index, a measure of the holistic performance of the Cedi on the inter-bank market now records a year-to-date depreciation of 7.02%.

 

GN Research

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