Alro announces that the Board of Directors no longer supports the proposed budget for 2014

• The newly increased quota for green certificates, higher by 17% compared to the previous estimation will negatively impact this year’s results
• The BoD will prepare an impact plan for idling part of the Company’s operations, in order to assess the viability of maintaining in operation the smelter

Slatina, 5 March 2014 – Alro SA (BSE: ALR, ‘Alro’, ‘the Company’), one of the largest aluminium producers in Central and Eastern Europe, announces today that because of the newly increased quota for green certificates, the Board of Directors (BoD) no longer supports the 2014 income and expenses budget, as previously proposed for the approval of the General Shareholders Meeting to be held on March 7^th, 2014.

For the 2014 Budget, the BoD assumed a reduction of the cogeneration bonus together with a decrease of the green certificates burden. However, on February 26^th, 2014, the quota for green certificates increased to 0.224 GC/MWh, as per Order 12/2014 signed by the National Authority for Energy Regulation (ANRE). This quota must be paid by all energy consumers as part of the subsidy scheme to support renewable energy production in Romania. Also, all the signals from the market shows that the speculative bubble of the subsidy for renewables will continue even more aggressively.

The increase of the eco-taxes was determined by the commissioning of new photovoltaic (a 2000% increase in capacities over the last year) and wind generation capacities installed by the end of 2013. The principal factors with significant impact are the lack of predictability of the application of the subsidy scheme for renewable energy as well as a significant fall of the aluminium quotations on the international market.

Under the new circumstances, Alro will have to pay for eco taxes a further RON 20 million, only for 2013 regularization and the impact in the budget 2014 is estimated to exceed the current forecasts of the Company with at least 80 million RON.

More importantly, the lack of any measures to support the industrial consumers – as lined out in the proposed guidelines issued for public consultations by DG Competition – puts Alro in a position to revaluate all operations for the year 2014.

Therefore, the Company is forced to prepare a plan to shut down a predominant part of key primary aluminum production facilities, thus drastically reducing the electricity consumption.

These measures would involve a significant reduction of the Alro workforce, thus they would be preliminary discussed with the social partners.

For further information please contact:

www.alro.ro

Florenta Ghita
Premium Communication
Bucharest
Phone +40 (0) 21 411 01 52
Email florenta.ghita@premiumpr.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 producer 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.