Alro reports a preliminary adjusted net profit* of more than RON 100 million, in 2016

Alro reports a preliminary adjusted net profit*

of more than RON 100 million, in 2016

Financial and operational highlights

• Turnover of RON 2.1 billion, compared to RON 2.3 billion in 2015
• Operating profit of RON 170 million, compared to RON 157 million in 2015
• Primary aluminium sales of 154,000 tonnes, compared to 145,000 tonnes in 2015
• Processed aluminium sales of approximately 77,000 tonnes, similar to 2015

Slatina, 15 February 2017 – Alro S.A. (BSE: ALR, "Company" or "Alro"), the largest aluminium producer in Continental Europe (excluding Russia and Scandinavia), announces today its preliminary financial results for the year ended 31 December 2016. The Company registered a preliminary adjusted net profit* of more than RON 100 million in 2016, higher compared to 2015 when it was of RON 45 million. The turnover of the Company stood at RON 2.1 billion, slightly lower compared to 2015, when it reached RON 2.3 billion.

“The investments we made over the past years in technology and in reducing our specific consumptions, as well as in expanding our products portfolio and quality, helped us to return to profit after several consecutive years of losses, during a period that is still difficult for our industry”, said Gheorghe Dobra, General Manager of Alro: “The financial results recorded last year confirm once again our strategy to focus on processed products with high added value, while increasing our efficiency and reducing our costs. Thanks to this strategy we can remain internationally competitive, while offering our customers a stable and reliable partnership”, added Gheorghe Dobra.

Alro sales value was affected by the continuing decline in aluminium prices on the international markets, although sales volume increased on the primary aluminium segment and remained constant for the processed aluminium segment. Thus, the average aluminium price on the London Metal Exchange (LME) was in 2016 of 1,605 USD/tonne, compared to 1,661 USD/tonne in 2015. Total primary aluminium production was of 273,000 tonnes in 2016, up compared to 2015, when it was of 271,000 tonnes and processed aluminium production stood at 79,000 tonnes, a level similar to the one recorded in 2015. Total sales reached RON 2.1 billion in 2016, compared to RON 2.3 billion in 2015.

Cost of goods sold decreased to RON 1.8 billion in 2016 from RON 2 billion in 2015, as the Company managed to capture and capitalize the lower prices of raw materials on international markets. Moreover, more than 10% of the primary aluminium produced at Alro comes from recycled scrap. For this type of aluminium, the electricity consumption is 90% lower compared to the electrolytic aluminium production. Additionally, general expenses were lower by more than five million lei compared to 2015.

Under these circumstances, the Company recorded an operating profit of RON 170 million last year, compared to RON 157 million in 2015, while the net profit stood at RON 67 million compared to a net loss of RON 24 million in 2015.

In 2016, Alro continued its investment program for increasing operational efficiency, reducing specific consumptions and expanding its products portfolio. Thus the Company invested RON 76 million in 2016 for technological upgrades. Moreover, the Company started a project financed by the European Regional Development Fund for research and development investments, while improving the research infrastructure for heat-treated aluminium alloy plates for highly qualified industrial applications.

Moreover, Alro has invested in reducing the industrial water consumption and modernizing its energy dispatch, with a positive impact on its final costs.

Preliminary financial results are available in a separate document on the website of Alro S.A.: www.alro.ro, category “Investor Relations”, section “Financial Reports”.

*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.
 
The figures for Alro S.A. included in this press release represent the Company’s financial results, reported in accordance with the Order of the Ministry of Finance no. 2844/2016, 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 impairment analysis of the investments insubsidiaries. Therefore, Alro final audited financial statements for 2016 may differ significantly from those 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 the largest aluminium producer in Continental Europe (except for Russia and Scandinavia) 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 (Germany, Hungary, Poland, Greece and Romania). Alro also exports to the United States of America and Asia. Alro is ISO 9001 certified for quality management and has NADCAP and EN 9100 certificates for aerospace production organizations, as well as ISO TS 16949 for auto industry production and Alro’s products adhere to the quality standards for primary aluminium on the London Metal Exchange (LME), as well as to the international standards for flat rolled products.