ALRO Group increased its turnover by 9% in 2018

Financial and operational information (preliminary results)

• Turnover increased to RON 2.98 billion in 2018, compared to RON 2.73 billion in 2017, thanks to favourable market conditions and sales mix

• Net profit of RON 233 million in 2018, compared to RON 391 million in 2017

• Dividends distributed of more than RON 694 million during 2018

• USD 77 million invested to enhance the Group’s profitability and competitive position

Slatina, 25 February 2019 – ALRO S.A. (BSE: ALR, “the Company” or “ALRO”), one of the largest vertically integrated aluminium producers, by capacity, in Europe, announces today its preliminary financial results for the year 2018. ALRO Group turnover increased to RON 2.98 billion, compared to RON 2.73 billion, in 2017, while the net profit decreased to RON 233 million in 2018, from RON 391 million in the same period of previous year.

"We are currently taking our development plan one step forward, focusing most of our efforts on supplying high and very high value added aluminium products, for exclusive markets, where quality of products and consistency in supply are key factors”, said Marian Nastase, Chairman of the Board of Directors of ALRO. “Last year, we continued to invest heavily in state-of-the-art technology that will support our goal to increase the production of sophisticated aluminium products, in line with our customers’ demand. This strategy not only helps us meet our financial goals, but also consolidates our position in the aerospace and automotive industries”, added Marian Nastase.

During 2018, the average LME quotation reached 2,110 USD/tonne, an increased level compared to 2017, when it stood at 1,969 USD/tonne, supported by a higher demand in aluminium products. As such, the Group's turnover increased to RON 2.98 billion in 2018, from RON 2.73 billion in 2017. The primary aluminium sales to third parties increased to RON 1.25 billion, last year, from RON 1.15 billion in 2017, while the processed aluminium sales were of RON 1.38 billion in 2018, a slight decrease from RON 1.40 billion, registered in 2017.

The Group’s preliminary gross profit was RON 670 million in 2018, from RON 688 million in the previous year. The result of the period was of RON 233 million, from RON 391 million in 2017.

Thanks to the positive results registered both in 2017 and in 2018, ALRO made significant investments to sustain its strategic goal of reaching a production capacity of 120,000 tonnes of processed aluminium by 2022. At the same time, ALRO believes that it is important to reward the trust of its shareholders and it continued to distribute dividends, whenever the Company registers profits. Thus, in 2018 the Company distributed dividends of RON 382 million, out of which the amount of RON 318 million represents net profit realized by ALRO in 2017 and RON 64 million represents retained earnings, which resulted into a gross dividend payable of 0.53523 RON/share. Later on, during the same year, the GSM approved on 13 December 2018 the distribution into dividends of the total amount of RON 327 million, out of which RON 203 million represents net profit realized by ALRO during the nine-month period ended 30 September 2018 and RON 124 million represents retained earnings, which resulted into a gross dividend of 0.45756 RON/share starting with 18 January 2019.

Throughout 2018, ALRO Group continued its long-term investment programme, for increasing the products’ quality and mix, with a main focus on high-value added products (“HVAP”) and very high value-added products (“VHVAP”). Therefore, ALRO Group implemented investments programmes in highly efficient technologies and equipment which is expected to generate a reduction in the production costs, extending the range of products, improving quality and level of satisfaction of the customers’ demand.

Thus, it modernized the Cold Rolling Mill no. 2 and replaced part of the electrolysis pots components, in order to sustain the budgeted level of production. Moreover, the Group continued the research investment projects dedicated to infrastructure for high-qualification industrial applications and to aluminium hydroxide technology (dry and wet), which are co-financed by the European Fund for Regional Development, through the Competitiveness Operational Program 2014-2020. This investment programme also covered improving the operational efficiency within ALUM.

Last year, the majority shareholder, Vimetco N.V., together with the shareholder Conef S.A., launched an accelerated private placement offer of a package of ALRO shares, representing a cumulative percentage of approximately 33.77% of the share capital of the issuer. As a result, the shareholding structure changed as follows: Vimetco N.V. continues to be the majority shareholder holding 54.19%, Paval Holding has 23.21%, Fondul Proprietatea holds 10.21% and other minority shareholders holding is of 12.39%. ALRO believes that this transaction, the largest private placement of stocks on Bucharest Stock Exchange in 2018, will bring medium and long-term benefits to both the Company and its investors by significantly improving the liquidity and visibility of the Company on the capital market, thanks to an increasing free-float.

These preliminary financial results are available in a separate document on the Company's website, Investor Relations category, Reports section: http://www.alro.ro/en/reports. 

These preliminary financial results are not audited. Therefore, the final audited statements for 2018 might be different from those included in this press release.

Figures included in this press release are reported in accordance with the Order of the Minister of Public Finance no. 2844/2016, which is in line with the International Financial Reporting Standards (IFRS) adopted by the European Union, with the exception of IAS 21 "The Effects of Changes in Foreign Exchange Rates” on the Functional Currency.

For further information, please contact:

Florența Ghiță, Bucharest

Phone: +40 744 644 004

Email: investor.relations@alro.ro

www.alro.ro

Notes to the Editors:

ALRO Group

The companies part of ALRO Group are: ALRO S.A. – manufacturer of aluminium, Alum S.A. – producer of alumina, Sierra Mineral Holdings I, Ltd. – bauxite mining, Vimetco Extrusion S.R.L. – extrusion business line, Conef S.A. – holding and management company, Global Aluminium Ltd. – holding company and Bauxite Marketing Ltd - marketing. Having this structure, the Group created an integrated production chain, assuring the raw materials for ALRO.

ALRO

ALRO is a subsidiary of Vimetco N.V., a global, vertically-integrated primary and processed aluminium producer. ALRO is one of the largest vertically integrated aluminium producers, by capacity, in Europe, having an installed production capacity of 265,000 tonnes per year.

The main market for ALRO products is represented by the European Union; the Company exports its products to the USA and Asia, as well. ALRO is ISO 9001 certified for quality management and has NADCAP and 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.