Alro reported operating profit, having a preliminary adjusted net loss* of RON 141 million, in 2014

Mon, 02/16/2015 - 10:05

Financial and operational highlights

  • Turnover of RON 2 billion, compared to RON 1.95 billion, in 2013
  • Positive EBIT of RON 51 million, compared to a negative EBIT of RON 211 million, in 2013
  • Adjusted net loss of RON 141 million, compared to an adjusted net loss of RON 86 million, in 2013
  • Primary aluminium sales of 140,000 tonnes, a similar level to the one reported in 2013
  • Processed aluminium sales of 77,000 tonnes, compared to 71,000 tonnes, in 2013

Slatina, 16 February 2015 – Alro S.A. (BSE: ALR, “the Company” or “Alro”), one of the largest aluminium producers in Central and Eastern Europe, announces today its preliminary financial results for the year ended 31 December 2014, prepared in accordance with the International Financial Reporting Standards (IFRS). The Company reported, for 2014, a preliminary adjusted net loss* of RON 141 million, compared to an adjusted net loss of RON 86 million, in 2013. The Company’s turnover increased by 2% in 2014, compared to the one reported in 2013, to RON 2 billion, from RON 1.95 billion, in the previous year.

“The measures we have taken to increase the efficiency of our operations, respectively to decrease the energy costs and the approximately USD 500 million investments, which have been made during the last 10 years, helped us to obtain a positive operating result, even though several external factors continued to negatively impact the final result”,said Marian Nastase, President of the Board of Alro S.A.

„The energy taxes, the low aluminium prices on the international markets and the significant apreciation of the US dollar, during a very short period of time, in December influenced our results and thus we continued to report losses this year, as well. However, we are confident that the recent measures to decrease by up to 85% the green certificates quota for the industry, which were approved at the end of 2014, will have a positive impact on our activity. These measures, together with the latest technologies implemented and with the efficiency increase measures, will allow us to continue our long-term development strategy”,added Marian Nastase.

The results of the Company were significantly influenced, in 2014 as well, by the costs with the         eco-taxes generated by the overcompensation scheme for the renewable energy sector, Alro incurring RON 550 million costs with green certificates and cogeneration tax in the last four years, out of which RON 130 million in 2014.

Furthermore, 2014 continued to be marked by low aluminium prices on the London Metal Exchange (LME), a new 5 years bottom being hit in February 2014 at 1,642 USD/ tonne, although the annual average was similar with the one in 2013, i.e.: 1,867 USD/ tonne, compared to 1,845 USD/ tonne.

In this difficult international context, which has witnessed several reorganisations and aluminium smelters shut-down since 2013, Alro continued its programmes focused on increasing the efficiency, in order to maintain its competitiveness at international level. Thus, after the Company’s commissioning of the scrap aluminium facility, it registered positive results both regarding the energy and raw materials consumption levels. Alro managed constantly to increase its sales of high added value products for which the profit margin is higher.

Under these circumstances, Alro registered a positive EBIT of RON 51 million, compared to a negative EBIT of RON 211 million, in 2013.

The Company continued to focus on developing the processed aluminium segment. Last year, the total primary aluminium production was of 263,000 tonnes, while the processed aluminium production was of 78,000 tonnes, a level higher by 7,000 tonnes than in 2013. In 2014, Alro registered an increase of the sales for the added value products, by 6,000 tonnes, while the primary aluminium segment reported similar sales as in 2013.

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

*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 2013, Alro’s management considers the Adjusted Net Resultas a more relevant indicator for the financial performance of the Company.

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. Therefore, Alro final audited results for 2014 may be significantly different compared to the ones included in this pres release.


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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.