Millions of dollars in financial losses linked to the cost of cocoa has left a bitter taste in the mouth of Goddard Enterprises Limited (GEL) management.
This, however, did not stop the Barbados conglomerate from earning a $22.4 million net profit during the three months ending December 31, which is the first quarter of GEL’s 2025 financial year.
Chairman Charles Herbert and managing director Anthony Ali reported on the group’s financial performance in the latest board review where they detail cocoa-related financial challenges.
“The manufacturing division was plagued with inefficiencies during the quarter; however, the division exceeded its target set as Ecuador Kakao Processing Proecuakao S.A. (Ecuakao) posted an operating profit in comparison to a loss in the comparative period,” the two officials reported.
They explained that “included within the cash flow hedge in the statement of comprehensive Income at the end of December, is an unrealised mark to market loss of $29 million related to unmatched cocoa futures”.
“The board has subsequently taken a decision to cap this loss at a cost of $9.7m. This means that our maximum loss from this exposure is $38.7 million, however, if there is a decline in the market price of cocoa beans, the loss will consequently decline,” Herbert and Ali said.
“An independent review committee of the board has been commissioned to work with external
consultants to make recommendations on preventing a reoccurrence.
“We have increased our resources within the Manufacturing Division to assist with turning around Ecuakao and mitigating against the risks faced as volatility in the market price of cocoa continues,” the chairman and managing director added.
Giving details on the first quarter profit, they explained that “if we were to exclude a one-time employee benefit expense of $2 million recorded during the quarter, profit from operations before other gains/(losses) – net would be in line with prior year at $23.8 million”.
They said that Caribbean Distribution Partners Limited (CPD) “was the largest contributor to the bottom line for the period as revenues grew by 4.2 per cent.
“At the end of quarter one, CDP acquired the remaining 20 per cent of the issued and outstanding shares of Chinook Trading Canada Limited, having previously purchased 80 per cent of the company in May 2023,” Herbert and Ali shared. (SC)
