Volt Power loses biggest client

ASX-listed Volt Power Group has suffered a major setback after BHP suspended its long-runing service relationship with wholly-owned subsidiary Wescone Distribution, less than a year after Volt bought Wescone.

BHP appears to be Volt’s largest customer, contributing revenue of $0.6 million in the six months to June 2018.

Volt’s overall revenue for the same period was $1.04 million.

Managing director Adam Boyd said the Volt board was very disappointed with BHP’s unexpected decision.

Volt said that, after 25 years of reliable supply and service, BHP had decided to use an alternative engineering services business to service its fleet of Wescone W300 sample crushers using non-OEM components for repairs and service.

The Henderson-based company sold six new W300 sample crushers to BHP as recently as May and June of this year.

It said this was part of ongoing negotiations that included a proposal to adopt a rental supply business model to ameliorate the capital cost impact of the purchases.

“BHP confirmed their desire to purchase the new crushers and advance good faith negotiations to conclude an ongoing related service contract,” Volt said today.

Mr Boyd said Wescone would continue to service all other customers with W300 sample crushers.

Volt stated in August that BHP and Rio Tinto were Wescone’s largest customers.

Wescone has a fleet of 280 sample crushers, with 60 per cent installed at the Pilbara iron ore majors.

The purchase of Wescone, along with 50 per cent of lighting tower supplier Equiquip, was designed to give Volt (formerly Enerji) the cash flow to support development of its ATEN power technology.

It paid $5 million for Wescone, which was founded by Perth businessman Kim Ledger.

Volt raised $4.75 million at 2.5 cents per share to fund the acquisition; its shares last traded at 2.0 cents per share.