Alro reports an adjusted net profit* of RON 145 million, in the first nine months of 2015

Financial and operational highlights

• Turnover of RON 1.77 billion, as compared to RON 1.44 billion in 9M 2014
• Increased sales revenue by 23%
• Increased primary aluminium production to 203,100 tonnes, from 194,300
• Processed aluminium production of 59,800 tonnes, from 59,200 tonnes

Slatina, 13 November 2015 – Alro SA (BSE: ALR, “The Company” or “Alro”),one of the largest aluminium producers in Central and Eastern Europe, registered an adjusted net profit* of RON 145 million in the first nine months of 2015, compared to a adjusted net loss* of RON 115 million in the similar period of2014. The Company’s turnover was of RON 1.77 billion, compared to RON 1.44 billion in 9M2014.

“The financial results obtained by Alro in the first nine months of this year are a clear signal that the strategy that we have been applying for over 10 years is the correct one, having maintained the Company’s sustainability in the most difficult market conditions”, said Marian Nastase, Chairman of the Board of Alro. “The quality increase of the sold product mix has helped us improve our margins and be profitable from an operating point of view, despite the fact that the aluminium market has been constantly decreasing. Furthermore, the reduction of the support scheme for the renewable energy sector has had a positive impact on our activity, eliminating the distortions which our industry has faced and allowing us to compete from an equal standing point with other companies inside or outside the European Union”.

If, during the first nine months of 2014, the average aluminium price on the London Metal Exchange (LME) was of USD 1,833 per tonne, this year the aluminium recorded a decrease to an average level of USD 1,717 per tonne in the first nine months of 2015 and reaching a minimum level of the period of little under USD 1,500 per tonne in August. In this difficult international context, Alro has continued its strategy of extending the production and sales of aluminium with high and very high added value, as well as its investments for increasing the efficiency of the operations and for reducing the specific consumptions.

Given the increase of the sales, Alro registered a cost of the sold goods of RON 1.45 billion in the first nine months of this year, from RON 1.34 billion in the similar period of 2014. The Company had a production of primary aluminium of 203,100 tonnes, from 194,300 tonnes in the first nine months of 2014, while the production of processed aluminium was of 59,800 tonnes, from 59,200 tonnes. In their turn, the sales of primary aluminium have increased by 3% (+3,000 tonnes), compared to the first nine months of 2014, while the sales of processed aluminium have recorded a slight increase of 1% (+800 tonnes) in the analyzed period.

The sales revenues have increased by 23% in the first nine months of this year compared to the similar period of 2014 as a result of Alro’s strategy of promoting the sales of high added value products both for the primary and processed sectors, and given the appreciation of the US dollar.

In this context, Alro registered an increase of the gross margin to 18% in the first nine months of 2015, compared to 7% in 2014. At the same time, the operating profit has increased from RON 15.6 million, during January-September 2014, to RON 218 million in the first nine months of 2015.

The Company will continue the programme of modernizing and increasing the efficiency of the operations, while focusing on increasing its recycling capacities and on further extension of its product portfolio.

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

For further information please contact:

www.alro.ro

Notes to the Editors:

Alro S.A.

Alro is a subsidiary of Vimetco N.V., a global, vertically-integrated aluminium producer with operations in Romania, China and Sierra Leone that is listed on the London Stock Exchange. Alro is one of the largest aluminium producers in Central and Eastern Europe 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 (i.e. Hungary, Poland, Greece, Germany and Romania), but the company exports to the U.S.A and Asia as well. Alro is ISO 9001 certified for quality management and has NADCAP and EN 9100 certificates for aerospace production industry. Alro 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.