Newscenta
Life-changing News

VALCO posts positive performance in second straight year

Volta Aluminum Company (VALCO) posts adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $5.7 million in 2022.

VALCO posts positive performance

The positive position reported for 2022 was achieved by the $8.86 million net gains realized from the innovative aluminum forward sale deal the Board and management struck with the company’s bankers.

The net profit after tax was however negative $4.88 million due solely to the $12 depreciation.

This is the second best ever performance in a decade, only to the results of 2021 where it posted $8.7 million. In 2020, VALCO posted negative $15.1 million EBITDA.

VALCO recorded $121.7 million in revenue representing growth of 13% compared to the $107.5 million revenue posted in 2021.

VALCO, Newscenta, EBIDTA, $5.7m, 2022 results, VALCO posts positive performance in second straight year , Ghana News,

Price variance contributed $19.2 million representing 18% while the shortfall in sales volume impacted negatively by some $8.5 million which represents 5.4% of total revenue growth in 2021.

In 2022, input prices escalated to record levels, growing the cost of sales by a much higher margin of 24% to $129.82 million.

Freight rates also increased during the period.

Addressing the 2022 Annual General Meeting (AGM) in Accra, VALCO Board Chairman Dr Henry Benyah announced that there are positive indications that a strategic investor could come on board before the end of this year to modernize and retrofit existing plants and facilities.

On the outlook and expectations,  he said successes chalked in the past three years from operational stability has provided a firm foundation for this year and beyond.

“This is in line with the objectives outlined in VALCO’s five-year strategic/recovery plan (2020-2024) which places emphasis on maintaining operational stability while transitioning to a retrofitted VALCO,” he added.

Dr Benyah said the board has strategically identified several product value maximization activities as well as a host of cost reduction initiatives for implementation.

These he believes will make VALCO’s operations sustainable in the short-term while working to implement the final phase of the recovery plan which is to locate a strategic partner for the VALCO modernization project.

He announced that VALCO is partnering Daiichi and Alumexin for the manufacture of LED lamps and aluminum profiles respectively.

In addition, the Board Chairman said VALCO has identified downstream market opportunities in Europe, America and West Africa     and is studying the possibility of establishing a 30ktpa rod processing mill  as well as the production of aluminum circles, sheets, and foils.

According to him, other value adding initiatives and opportunities in the downstream sector are also being considered

Dr Benyah stated that “The future of aluminum is green. VALCO posts positive performance is an indication that the company is positioning itself to benefit fully by selling low-carbon aluminum products.

Chief Executive Officer (CEO) of VALCO, Daniel Acheampong cited slump aluminum prices, increase in input prices, prolonged power outage on August 17, 2022 as some of the factors that impacted performance negatively.

He announced plans to operate optimally at 125 cells, to average minimum of 123 cells by end of this year.

According to him, the plan is to move the cells count numbers up significantly to 150 and beyond once the market conditions improve.

Acheampong noted that while consolidating the stability of operations with the 2023 budget, the overarching priority will be  to channel all synergies into the location of strategic investor to implement the major retrofit project approved by cabinet.

VALCO was created in the 1960s after Ghana’s independence from Britain in 1957.

Ghana fully owns Valco after buying Kaiser Aluminium’s 90%  stake in 2004 for $18 million and acquiring the outstanding 10% stake from U.S. aluminium maker Alcoa four years later for $2 million, with plans to establish an integrated industry including a 2-million tonne/year alumina refinery.

 

 

 

 

Leave a comment
error: Content is protected !!