Govt must reduce stake in PBC

Business (lead) Feb. 11/2008

Story: Charles Benoni Okine

THE Managing Director of the Ghana Stock Exchange (GSE), K.S. Yamoah, has called on the government to reduce its shareholding in the Produce Buying Company (PBC), the only state-owned cocoa purchasing company to improve the performance of its shares on the exchange.
He said the positive performance of the company last year had raised public interest in the company and noted that the time was ripe for the government to release part of its shares to the public.
Mr Yamoah made the call last Friday when the management of the PBC took its turn at the “Facts behind the Figures” on the floor of exchange to explain to a cross-section of stockbrokers and financial journalists the performance of the bank and its outlook for the ensuing year.
The company, which holds 31 per cent of the total market share in the purchases of cocoa beans, posted a profit before tax of GH¢713,605 for the 2006/2007 financial year, a recovery from a slight loss the previous year.
Presently, the price of its shares stands at GH¢0.2400 at the close of trading last Thursday.
In the last quarter of last year, the company’s unaudited financial results indicated a rise in net profit from to GH¢1,390,096 in 2006 to GH¢1,644,811.
“The company has a potential and needs to be more liquid than it is now, so that should the government reduce its holdings on the company, it will be in a better stead to perform on the exchange,” Mr Yamoah added.
Presenting the facts behind the figures, the Managing Director of the PBC, Mr Anthony Osei Boakye, said there was no turning back for the company at the moment.
He described past losses in the company as unfortunate and gave the assurance that the company had put in place pragmatic measures to improve its market share performance and profitability.
Mr Boakye said the company had acquired a fleet of vehicles, including trucks, in excess of 130 for haulage and was ready to entrench its position as the market leader.
The national cocoa production for 2006/2007 was 614,532 tonnes, out of which PBC purchased 186,051 tonnes, representing 31 per cent of the market share.
Deputy Managing Director in charge of Finance and Administration, Mr J. Osei Manu, described the year as another eventful but successful year for the company saying “although the company registered a significant reduction in both volume and value of cocoa purchased, this year’s performance has laid down a solid foundation for the achievement of targets in our new medium-term corporate plan”.
The company’s turnover has decreased from GH¢248.66 million to GH¢195.11 million, mainly due to a decrease in volume of the cocoa purchased.
With the general decline in national cocoa production from 740,000 tonnes in 2005/06 to 614,532 tonnes due to unfavourable weather conditions, the company’s tonnage purchased reduced by 23 per cent from 242,473 tonnes in 2005/2006 to 186,051 tonnes this year, he said.
He said the company would diversify its revenue base through increased freight earnings, and that the company had secured an GH¢8.5 million medium-term loan from two financial institutions to acquire 100 cargo trucks and 34 articulated trucks.