Aluworks Ghana Limited made a loss of GH¢4.4 million after tax in 2014.
In 2013, the company recorded a loss of GH¢1.5 million, and the increase in the losses has been attributed to financing costs, which overwhelmed the relatively good margins that had been achieved.
In 2014, exchange losses amounted to GH¢6.7 million, well above the budget of GH¢1.97 million and the previous year’s GH¢3.2 million, which was considered high at the time.
The Managing Director of the company, Mr E. Kwasi Okoh, who disclosed this at the company’s 28th annual general meeting (AGM) in Accra, said “financing costs were extremely high in 2014 mainly because of the unprecedented cedi depreciation”.
He said turnover was, however, 32 per cent, up on previous figures, while sales amounted to GH¢76,845 million, compared with GH¢58,026 million in 2013, most of which was driven by the stream of increasing exchange rates during the year.
Mr Okoh said the company’s total production in 2014 stood at 7,941 tonnes, compared with 8,607 tonnes in 2013.
He explained the reason for the drop as including the availability of cheap imported material from China which led to a significant reduction in export orders from the country.
“Sales volumes and our production tend to move together because we have fashioned our coordinates and arrangements in that way,” he stated, adding that in 2014, the company sold a volume of 7,947 tonnes, down on the volume of 8,376 tonnes in 2013.
He said the mix of local to export sales in 2014 therefore diluted to 70:30 compared with 64:36 in 2013.
The Managing Director mentioned some of the difficulties faced by the company during 2014 as the rapid depreciation of the cedi, saying that in the first half of 2015 they had had both a rapid depreciation of the cedi as well as a dire shortage of power.
Due to the company’s difficulties and performance in the year under review, it was unable to declare any dividends and will not pay any for the period.
The Chairman of the board of Aluworks, Mr Seth Adjei, said the difficulties the company faced prevented it from declaring profits and therefore had a debit balance in its surplus account.
The focus of the company’s board, therefore, he stated, was to restructure the financing of the company in a bid to reduce the huge burden of financing costs.