Nigeria’s listed cocoa manufacturer, FTN Cocoa Processors Plc, has returned to profitability for the first time in nine years, posting a profit after tax of N954.37 million for the quarter ended March 31, 2026, compared with a loss of N575.55 million in the corresponding period of 2025.
This was driven by a 90 percent rise in revenue, a turnaround in foreign exchange gains, and improved operating performance.
According to the unaudited financial report for the period ended March 31st, 2026, revenue nearly doubled to N1.09 billion from N572.02 million, reflecting increased sales of cocoa products across export and local markets.
Export revenue rose to N81 million, while local sales rose to N1.08 billion, particularly driven by cocoa powder, which accounted for 98 percent of the bulk of top-line growth.
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Despite the expansion in revenue, the cost of sales rose sharply to N999.74 million from N578.91 million, largely driven by higher raw material costs, which increased to N648.81 million from N298.84 million, and elevated direct production expenses. Personnel costs and factory-related expenses, including repairs and maintenance, also contributed to the increase, reflecting higher operational activity during the period.
The company recorded a gross profit of N89.46 million, reversing a gross loss of N6.88 million reported a year earlier, as revenue growth outpaced cost increases.
Operating expenses declined to N94.91 million from N119.87 million, supported by a reduction in employee benefit expenses and lower bank charges, indicating cost control measures. However, selling and distribution expenses rose to N34.81 million from N3.73 million, reflecting increased logistics and market expansion activities.
Other operating income increased to N100.50 million from N21.76 million, supported by cocoa value addition activities and sundry income streams. A foreign exchange gain of N1.03 billion, compared with a loss of N334.55 million in the prior year, lifted operating profit to N1.09 billion from a loss of N443.27 million.
Finance costs rose to N136.71 million from N132.28 million due to interest on borrowings and corporate bond obligations.
Beyond earnings, cash flow performance showed a recovery in liquidity, with net cash generated from operating activities rising to N879.83 million from N879.59 million in the prior year, reflecting improved working capital management and non-cash adjustments.
The operating cash flow was driven by profit before working capital changes of N262.24 million, adjusted for significant non-cash items, including depreciation of N202.00 million and interest expenses of N136.71 million, while the large foreign exchange gain of N1.03 billion reduced reported operating cash earnings due to its non-cash nature.
Working capital movements contributed N617.59 million to operating cash flow. This was largely supported by a decline in receivables, which released N2.31 billion in cash, reflecting improved collections. However, this was partly offset by a N1.62 billion increase in inventories, indicating higher stock build-up from increased production, and a N71.32 million reduction in payables, showing settlement of supplier obligations.
Cash flows from investing activities remained negative at N165.33 million, mainly due to capital expenditure on property, plant and equipment of N28.63 million and interest payments of N136.71 million, reflecting ongoing maintenance of production capacity and debt servicing.
Financing activities generated net cash of N84.13 million, supported by capital reserve movements of N784.72 million, while borrowings declined by N700.59 million, indicating partial repayment of debt obligations during the period.
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Overall, net cash increased by N798.63 million, pushing cash and cash equivalents to N1.42 billion from N622.21 million at the beginning of the period.
The share price of FTN Cocoa has dropped by 28.5 percent as investors are bearish on the company’s stock as a result of the losses recorded over time.
Despite this, the company’s stock is currently the 93rd most valuable stock on the NGX with a market capitalisation of N19.5 billion, which is about 0.013 percent of the Nigerian Stock Exchange equity market.