Aluworks records unimpressive performance
... but expects a turn around - MD Accra, March. 2, GNA - Aluworks Ghana Limited (ALW) on Wednesday said it intended to pay a dividend of 450 cedis per share to its equity holders despite an unimpressive performance registered for the year ended 2004. When the company appeared at the 'Facts Behind the Figures' programme organised by the Ghana Stock Exchange, Mr Venkataramana Kondagunta, Managing Director, said profit after tax increased by only five per cent but the board had proposed payment of an additional 300 cedis per share to an interim dividend of 150 cedis per share paid in December.
The decision to pay the additional dividend would be taken at the next annual general meeting and the 450 cedis if accepted would make the figure higher by 12.5 per cent over that of 2003. Profit after tax stood at 19.3 billion cedis in 2004 as against 18.4 billion cedis in the previous year but the company is optimistic that it would register 69 billion cedis in profit after tax for the current financial year. It also expects to achieve this feat by cutting cost by 25 per cent and increasing exports by 40 per cent.
"The company expects to see next year's operations registering better results since the benefits of strategies such as cost cutting exercise and global sourcing of spares and consumables already put in place will reduce our operating cost and thereby enable us mitigate the effects of the rising aluminium prices on the world market," Mr Kondagunta added.
Exports for 2004 increased by 29 per cent from 14.8 million cedis to 19.1 million cedis but profit before tax remained flat at 25.4 billion cedis. Mr Kondagunta explained that Aluworks' profit before tax increased by four per cent to 26.4 billion cedis but a staff rationalisation exercise in 2004 resulted in the out-sourcing of some non-core activities at a cost of 1.1 billion cedis. Another major challenge that led to the unimpressive performance was the soaring of the Aluminium prices on the world market from a three-month price of 1,557 dollars per ton to a new high of 1,972 dollars per ton.
Aluminium is the company's raw material and it is imported as a semi-finished product. It gained a 26.7 per cent price appreciation from the beginning of 2004. Mr Kondagunta said turnover increased by 21 per cent from 377.2 billion cedis to 458 billion cedis while sales volume went up by 10 per cent from 17,656 metric tonnes to 19,497 metric tonnes. Export volumes went up by 21 per cent from 6,408 metric tonnes to 7,754 metric tonnes. Mr Kondagunta said the general performance at the export level was very encouraging because the company developed new markets in Togo, Benin and Burkina Faso as a result of which it registered the highest export sales since the inception of the plant.
Aluworks is also expectant that Valco's reopening would impact positively on the company by reducing cost of metal, fuel and increases and other production cost. Managers of Aluworks say they also intend to pursue the colour coating line and foil rolling mills projects for which it had already re-organised itself for implementation.