Alro invests in reducing energy dependency

Slatina, June 13, 2016 - Alro S.A. (BSE: ALR, "Company" or "Alro"), the largest aluminium producer in Continental Europe (excluding Russia and Scandinavia) has an investment program of over USD 53 million, for 2016, focused on increasing energy and equipment efficiency and on expanding portfolio, increasing competitiveness and product quality.

"Alro has a constant strategy for reducing energy consumption, in order to preserve the operational efficiency on a highly competitive international market," said Gheorghe Dobra, General Manager of Alro."The investments we have made, both in equipment and in research and development have enabled us to achieve one of the highest levels of energy efficiency in the aluminium industry. Under these circumstances, the solution to further reduce energy consumption consisted in investing in a facility for recycling of aluminium scrap, whose capacity we plan to expand this year."

The investment program for 2016 includes the increase of scrap processing capacity of Eco Cast House, such as to reach a capacity of 90,000 tons per year. In addition, the Company invests in increasing the energy efficiency of the existing processes. The measures, part of Alro’s energy efficiency plan, were agreed with the accredited energy efficiency auditor and notified to the competent authorities. Thus, Alro will commission a new line of aluminium scrap processing, with a capacity of 60,000 tons per year.

The Company has built a new station, Eco Cast House, to provide some of the liquid aluminium from alternative sources, partially replacing the aluminium produced by electrolysis, process that requires a significant consumption of electricity. Thanks to the investments made over the last 10 years, Alro has reached 99% of the maximum possible efficiency of the electrolysis sector. This result is presented in the study "Energy Efficiency and Greenhouse Effect Emissions: Possible Scenarios for the Aluminium Industry," published last year by the Joint Research Center, at the request of the European Commission. The study emphasizes that Alro has implemented three out of four possible phases for optimizing the electrolysis process and was ranked fourth among 18 plants in Europe.

In addition to the energy efficiency investment, in 2016 Alro continues to invest in expanding the client portfolio by increasing the production capacity of the Processed Aluminium Division (heat treated plates, cladded products), as well as ensuring the continuity and safety of the operations of the Company.

In the first quarter of this year, Alro registered an adjusted net profit* of RON 41 million, compared to RON 23 million in the similar period of 2015. The Company’s turnover was of RON 564 million, from RON 598 million in the similar period of 2015.

In primary aluminium sector, Alro registered higher sales by 23%, mostly as a result of higher shipments for wire rod and billets that were up 4,500 tonnes, and 2,500 tonnes respectively. For processed aluminium, the Company registered sales up by 4%, as a result of higher shipments for thin sheets and coils that were up 1,000 tonnes compared to Q1 2015.

Alro’s net profit increased to RON 27 million, in Q1 2016, from RON 6 million, in Q1 2015, a significant impact having the exchange differences related to the re-evaluation of the foreign currency denominated loans.

*Adjusted Net Result: Company’s net result plus/ (minus) non-current assets impairment, plus/ (minus) the loss/ (gain) from derivative financial instruments that do not qualify for hedge accounting, plus/ (minus) deferred tax.

Given the significant impact generated by the mark to market of the derivative financial instruments that do not qualify for hedge accounting, starting with the first quarter of 2015, Alro’s management considers the Adjusted Net Result as a more relevant indicator for the financial performance of the Company.

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www.alro.ro

Notes to the Editors:

Alro is subsidiary of Vimetco N.V., a global, vertically-integrated primary and processed aluminium producer. Alro is the largest aluminium producer in Continental Europe (except for Russia and Scandinavia) with an installed production capacity of 265,000 tonnes per year.

The main markets for the aluminium manufactured by Alro are within the European Union (Hungary, Poland, Greece, Germany and Romania). Alro also exports to the United States of America and Asia. Alro is ISO 9001 certified for quality management and has NADCAP and EN 9100 certificates for aerospace production organizations, as well as ISO TS 16949 for auto industry. Alro’s products adhere to the quality standards for primary aluminium on the London Metal Exchange (LME), as well as international standards for flat rolled products.

The contents of the website www.alro.roare not incorporated into, and do not form part of, this announcement.