Volta Aluminium Company Limited (VALCO) has recorded positive performance of US$5.7m in 2022 from adjusted earnings before interest, taxes, depreciation and amortization(EBITDA).
The positive position reported for 2022 was attained by the US$8.86m net gains realised from the innovative aluminium forward sale deal the board and management struck with the company’s bankers.
According to thee Chairman of VALCO, Dr Henry Benyah, the positive outcome can also be attributed to price risk management initiative and cost containment/reduction measures as well as the relative operational stability achieved over the last three years.
VALCO recorded US$121.7m in revenue representing growth of 13percent compared to the US$107.5m revenue posted in 2021. Price variance contributed US$19.2m representing 18percent while the shortfall in sales volume impacted negatively by some US$8.5m which represents 5.4percent 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 24percent to 129.82m. Freight rates also inched up during the period.
Addressing shareholders at the company’s Annual General Meeting (AGM) in Accra, Dr. Benyah also announced that the company is on the market to identify a strategic investor before the turn of the year.
This follows the approval by the Cabinet of Ghana for VALCO and the Ghana Integrated Aluminium Development Corporation (GIADEC) – the entity holding VALCO’s shares on behalf of the Government of Ghana – to headhunt and engage a Strategic Partner towards the retrofit (modernization) of the Smelter to bring to it to world-class standard in terms of technology, operating efficiencies and costs, profitability, among other benefits.
He also indicated that transaction advisors have been engaged “to manage the process of the search and selection of a Strategic Partner with the requisite technical capacity to deploy the most competitive smelter technology, backed by the needed investments and strategic global linkages in consideration for an agreed equity stake in a restructured VALCO”.
Reporting on the operational performance of the Company, the Chief Executive Officer, Mr. Dan Acheampong was very pleased to note that VALCO has come a long way from where it faced huge existential challenges, to a relatively stable and productive business, in readiness for the expected massive take off with the sourcing of a strategic investor.
Further, Mr. Acheampong told the meeting that notwithstanding improvements in performance in the last three years, the company was not out of the woods yet. However, team VALCO, he continued, was committed to working in line with its principle of “continuous improvement,” leaving no stone unturned and has been building upon these improved performances to bolster confidence in the company’s ability to become a world class smelter.
The company hopes to leverage its successes in the last three (3) years regarding operational stability to lay a firm foundation for 2023 and beyond. This is in line with the objectives outlined in its five (5) year Strategic/Recovery Plan (2020-2024) which places emphasis on maintaining operational stability as it transitions to the “Retrofitted VALCO” to assure a sustainable turnaround.
The Minister of Public Enterprises, Joseph Cudjoe who was present at the event commended VALCO for improved performance since 2011 and pledged government’s support to revamp the aluminium smelter.
The Company says it has identified some product-value maximization and a host of cost reduction initiatives to make the operation sustainable in the short-term while working to implement the final phase of the Recovery Plan. This is in consonance with the VALCO Modernization Project dubbed Project 4 under GIADEC’s Integrated Aluminium Industry (IAI) Project Masterplan currently under execution.
In the coming year, VALCO emphasizes that it will position itself firmly in the aluminium downstream segment of the Aluminium value chain. This it hopes to do by way of entering into joint ventures (some of which are currently in the developmental stages) or direct participation in the high-end value-addition downstream segment of the Aluminium value chain. The company believes that incorporating downstream activities into its operations like all globally competitive smelters have done, would make its operations more viable.
VALCO also recognizes the fact that the future of aluminum is “green”. It is therefore, positioning itself through various environmentally-friendly initiatives to reduce its carbon footprint in order to take its pride of place as a net carbon emitter and a “Green Aluminium” Smelter.