Alro reported a preliminary adjusted net profit* of RON 85 million, in 2015

Financial and operational highlights

·         Turnover of RON 2.3 billion, compared to RON 2 billion, in 2014

·         Operating profit of RON 198 million lei, compared to RON 32 million, in 2014

·         Primary aluminium sales of 145,000 tonnes, compared to 140,000 tonnes, in 2014

·         Processed aluminium sales of approx. 77,000 tonnes, similar to 2014

Slatina, 15 February 2016 – Alro S.A. (BSE: ALR, “the Company” or “Alro”), the biggest aluminium producer in Central and Eastern Europe, which celebrated its 50^th Anniversary on June 30,  2015,   announces today its preliminary financial results for the year ended 31 December 2015. The Company registered a preliminary adjusted net profit* of RON 85 million, in 2015, compared to an adjusted net loss of RON 134 million, in 2014. The turnover of the Company increased to RON 2.3 billion, from RON 2 billion, in the previous year.

“The financial results registered by our Company last year prove, once again, that the strategy we implemented was correct and it can maintain the viability of the Company in the toughest market conditions”,said Gheorghe Dobra, General Manager of Alro.“The investments of over USD 550 million in the past 11 years helped us consolidate and expand the products portfolio, reduce the specific consumptions and the total costs. Also, the adjustment of the support scheme for the renewable energy has the role of eliminating the distortions our industry has faced, allowing us to compete fairly with other companies in this industry”, added Dobra.

Last year, the international aluminium market continued to drop significantly, with major impact on the prices. If the minimum of 2014 was of USD 1,642 per tonne, in 2015, the minimum was below USD 1,440 per tonne, registered in November. In its turn, 2016 didn’t bring any recovery in the aluminium price either, the quotation staying below the level of USD 1,550 per tonne.

Considering this difficult context, the Company’s cash flows were further impacted by the obligation of acquiring the full quota of green certificates for 2014, which happened in Q1 2015. This was financed through a short-term loan, out of which 75% had already been reimbursed by 31 December 2015.

In order to be able to operate in a decreasing  international market, Alro continued its investment programs to enhance the output for high added value products, as well as the operational efficiency and to decrease the energy dependence.

Moreover, the raw materials costs decreased thanks to the scrap aluminium recycling facility. About 10% of the primary aluminium produced at Alro is from recycled scrap. For this type of aluminium, the energy consumption is 90% lower than the level necessary for producing electrolytic aluminium. Also, the Company continued to focus on the development of high processed aluminium, for which the margins are superior.

Last year, the total production of primary aluminium was of 271,000 tonnes, increasing from 263,000 tonnes, registered in 2014. The processed aluminium production was close to 79,000 tonnes, compared to 78,000 tonnes, in 2014.

In 2015, Alro registered an increase in sales for high and very high value added products, both for the primary aluminium sector, and for the processed aluminium sector. Thus, for the primary aluminium sector, the Company registered an increased of the sales of wire rod with approx. 4,500 tonnes and, in the processed aluminium sector, Alro sales of coils increased by 1,000 tonnes.

Under these circumstances and as a result of the appreciation of the USD compared to RON, Alro’s sales increased in value by 15%, in 2015, compared to 2014. As a consequence, the gross margin of the Company increased at 15%, in 2015, compared to 8%, in 2014. Alro registered an EBIT of approx. RON 198 million, compared to RON 32 million, in 2014. The net profit of the Company was of RON 9.6 million, in 2015, compared to a net loss of RON 109 million, registered in 2014.

Last year, Alro also secured the necessary investment funds, signing a loan facility with Black Sea Trade and Development Bank, of USD 60 million, out of which USD 15 million were already invested in the Company in 2015.

The Company also signed a revolving loan worth USD 137 million with a syndicate of banks, through which it mainly refinanced a loan from the European Bank for Reconstruction and Development, worth USD 120 million, obtained in 2010.

The preliminary financial results are available in a separate document on the website of Alro S.A.: www.alro.ro

The figures for Alro S.A. included in this press release represent the Company’s preliminary financial results, reported in accordance with the Order of the Ministry of Finance no. 1286/2012 with the updated amendments, which is in accordance with IFRS, as adopted by the European Union, except for IAS 21 The effects of changes in foreign exchange rates. The preliminary financial results are not audited and do not include the results of the depreciation test of the investments in subsidies and the analysis of the recognition criteria for the deferred tax asset. Therefore, Alro final audited results for 2015 may be significantly different compared to the ones included in this press release.

For further information please contact:

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 one of the largest aluminium producers in Central and Eastern Europe measured by volume with an installed production capacity of 265,000 tonnes per year.

The main markets for the aluminium manufactured by Alro are within the EU (Hungary, Poland, Greece, Germany and Romania). Alro also exports to the US and Asia. Alro is ISO 9001 certified for quality management and has NADCAP as well as EN 9100 certificates for aerospace production organizations. Alro’s products adhere to the quality standards for primary aluminium on the 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.