The Precious Minerals Marketing Company (PMMC) has recovered from the losses it made two years ago to post a marginal net profit of GH¢53,000, ahead of plans to open the state-controlled firm to private participation.
In 2011, PMMC recorded a loss of GH¢313,000 -- but has turned around its fortunes despite being faced with difficulties in the business operating environment.
The Board Chairman, Kwabena Kyereh, said the company’s financial position in 2012 was achieved as a result of the firm’s focused activity in jewellery sales, which boosted its turnover by 11.6% to GH¢164.8 million.
According to the company’s financials, while the growth-rate in jewellery sales increased by 25 percent, the growth in PMMC’s other revenue-generating streams such as gold and diamond exports all went down by 40 percent -- which affected the foreign exchange earning position.
Additionally, the company faced high borrowing costs, as about GH¢654,000 were paid as a financial charge on loans borrowed to augment the company’s working capital -- affecting its financial position.
Mr. Kyereh said the increase in jewellery sales is a boost to management’s drive to ensure value addition to rough diamonds and gold before export.
He said the company could not pay any dividend to Government because it wants to reinvest the profit to ensure the sustainability of its earnings position.
He said the company’s operations are now being challenged by the activities of foreign gold traders in the small-scale mining sector, and sought government intervention to streamline the operations of small-scale miners in the purchase and export of gold.
“The small scale mining sector is fraught with several irregularities in the purchase and export of gold. The influx of foreign buyers who buy gold above world market prices doesn’t make us competitive in the market, due to the fact that as a wholly-owned government company, we have to comply with the Foreign Exchange Act 723 in all our foreign currency dealings.
“It is therefore imperative that the issue concerning the purchase and export of gold from the small-scale mining sector be addressed to enable us to raise more revenue for government,” said Mr. Kyereh.
The Minister of Lands and Natural Resources, Alhaji Inusah Fuseini, said government is concerned about the interest the company pays for contracting loans for its operations, and is looking at the option of diluting the state’s stake in the company to allow for private participation.
“From the financials, it is obvious PMMC spent quite a lot of money on interest charges because of the company’s capitalisation. The effort at private-public partnership will be intensified to open up PMMC for private participation. This should inject the needed capital to improve their operations,” he said.