Delivery is everything
Largo management failed miserably to deliver on the company’s promises. The company’s anti-transparency corporate culture provides an environment where bad performance becomes business-as-usual and allows executives to mislead shareholders without any consequence.
Here are some revealing facts among others:
While 90% of Largo’s market cap was destroyed since commercial independence, the annual compensation of the top tier executives has increased to 7-figure and the professional /consulting /management fees (P/C/M fees) have also skyrocketed. In 2021 (the first full year of independence) the P/C/M fees doubled to US$17.9M from $8.3M of the previous year. In 2022 the PCM increased another 41% to $25.3M. In 2023 they were $23.1M. Management expects to reduce the number of contractors by 20% in Q2-24. Not sure what it means in terms of saving dollarwise for Q2-24. In general, costs have increased dramatically since commercial independence. The fact that Largo fails to control costs while V2O5 prices continue to decline coupled with management inability to deliver on their promises points to a ship struggling to stay afloat in an ocean of red ink.
The sales director who purposely provided misleading information about the iron-ore fiasco to the stakeholders got rewarded and fast tracked upward to the top tier of leadership.
The 8-month negotiation with Ansaldo Green Tech for the establishment of a joint venture to distribute VRFB in the European, African and Middle Eastern markets was a complete waste of time.
In one of the latest failures to deliver this sub-par management team could merely sell 513T of Ilmenite out of a production of 18,233T from Oct 2023 to March 2024. “Due to the operational and administrative delays” they claimed? And no accountability whatsoever? Note that operational & administrative issues are under the contol of the management team therefore management is responsible for the delays.
So regardless of what / how many catalysts are to be expected, delivery will determine success or failure.
Imho, a new high-caliber CEO is desperately needed to turn this ship around before it’s too late. It has already been more than a year since the departure of Paulo Misk. How much longer do we have to wait? Unless Largo is so “unattractive” that no good-name wants to join, this a failure from Arias and the BoD to deliver.