Manufacturing firms record huge losses
MANY manufacturing firms continue to record losses in their operations due to a host of factors including the hostile exchange rate market and the poor power situation in the country.
The Business Finder has learnt that the rolling power outage or ‘dumsor’ has had a devastating effect on firms’ administrative and operating expenses as well as their cost of sales.
This is evident in the negative growth of the manufacturing sector for the first half of 2015, according to the Ghana Statistical Service.
Aluminium smelter, Aluworks and African Champions Industry (ACI) are the latest firms to register losses in their third quarter financials.
Brewery giant Guinness, some textile firms and others have also recorded losses so far due to the deteriorating operating environment.
Aluworks registered a loss of GH¢9.6 million at the end of September 2015, compared with a loss of GH¢2.4 million the same period last year. Its revenue was however marginally higher at GH¢61.9 million during the first nine months of 2015 as against GH¢58.9 million September 2014.
The aluminium smelter had GH¢18.5 million in inventory at the end of the third quarter of this year as against GH¢14.9 million the same period last year.
ACI net profit margin according to Reuter’s analysis was negative10.51 percent compared with an industry average of 2.27 percent.
The toilet roll manufacturer however saw its revenue going up slightly at the end of September 2015 compared with the same period 2014.
Guinness Ghana also recorded a net loss of GH¢19.8 million between July 1, 2015 and September 30, 2015 as against a loss of GH¢26.7 million the same period 2014. The brewery giant has been complaining about foreign exchange losses and unfavourable economic conditions on its business.
Mining firms have also not been spared as Canadian mining giant, Golden Star Resources which operates the Wassa and Bogoso mines in the western region sold a total of 51,898 ounces of gold for the third quarter of 2015 compared with 55,132 ounces of gold during the first half of this year. It also posted a loss of US$6.8 million during the period.
GoldFields Ghana Limited has also been hit by the operational losses, compelling it to consider laying off some thousands of workers.
However, pharmaceutical firm, Ayrton Drugs and printing firm, Camelot Ghana made some profits at the end of the third quarter of 2015. They registered GH¢485,931 and GH¢97,389 respectively though the administrative expenses were huge.
Meanwhile, figures from the Tema District Council of Labour indicate that thousands of workers have been laid off since January 1, 2015.
Though the figures have not been made available the workers are mainly from the heavy manufacturing sector with some coming from the light industry.
Already, the Tema District Council of Labour has threatened to embark on unprecedented industrial unrest if the Public Utilities Regulatory Commission increase water and electricity tariffs.
It says such increment will worsen the plight of industry while making the livelihood of public sector workers even more precarious.
In the mining sector alone, more than 10,000 workers have lost their jobs since the ‘dumsor’ intensified last year. Gold price on the world market also took a toll on the gold sector.