Alro reports a preliminary net loss of RON 170 million for 2012*

Thu, 02/28/2013 - 19:31


Financial and operational highlights*

  • Revenues of RON 2,300 million, slightly increasing from previous year
  • EBIT of RON 289 million, 30% lower than in 2011 mainly due to weak market and higher utilities cost
  • Modernization programme worth RON 70 million for improvement of productivity and efficiency

Slatina, 28 February 2013 – Alro SA (BSE: ALR, “Alro”, “the Company”), the largest aluminium producer in Central and Eastern Europe, today announces its preliminary unconsolidated results for the year ended 31 December 2012, according to the International Financial Reporting Standards (IFRS)*. The Company reported a preliminary net loss of RON 170 million, compared to a profit of RON 218 million, registered in 2011. The main negative influence (RON 262 million) was generated by the derivative embedded in the Company’s main energy supply contract with a specific IFRS treatment, but without a similar effect in the Company’s cash-flow.

The revenues amounted RON 2,300 million, increasing slightly from RON 2,250 million, in 2011.

“Alro capitalized on its major investments made in Romania, and was able to achieve its operational targets, despite the challenging international market conditions”, said Marian Nastase, President of the Board of Alro. “We also improved our products portfolio and services, and were able to meet the demand of a wider range of customers. However, unforeseeable external factors, such as those linked to the energy supply and taxes, influenced our overall costs, drastically impacting the final result”.

In 2012, the overall electricity costs increased by RON 172 million, compared to the previous year, from RON 659 million, to RON 831 million.

Alro’s operational result was negatively affected by extrinsic factors like low level of aluminium market and high electricity cost. The severe draught that affected Romania during the first half of 2012 forced the Company to purchase a significant quantity of energy on the Day Ahead Market and from the Balancing Market at higher costs. In addition Alro witnessed the insolvency declared by its main power supplier, Hidroelectrica. In this context, the two parties negotiated the contractual clauses and reached an agreement for 3 TWh/year of green energy until 2018.

A significant issue became the green energy incentives schemes, as well as other taxes on electricity, which added to the total costs of the utilities.

Despite those factors, Alro continued its long-term strategy of increasing the high added value output. The Company’s total primary aluminium production for last year was approx. 249,000 tones, from 261,000 tones a year before. The processed aluminium production reached 64,000tones, up 9,400 tonnes compared to 2011 (54,600 tones).

The increase in output for processed products partially offset the drop of the aluminium prices on the international markets. Thus, the aluminium quotation on the London Metal Exchange (LME) fell to an average of 2,018 USD/tone, 2012, compared to a level of 2,440 USD/tone, in 2011.

Besides the improvement of product portfolio, and increase of production for high added value, Alro also invested in further reduction of energy consumption. Last year, the Company’s investments reached RON 70 million, compared to RON 85 million in 2011. The improving efforts will continue, including plans to optimize production and performance in the Company’s operations.

“We invested heavily in increasing the energy efficiency of the Company, in order to reach low consumption of electricity and gas. In seven years time we succeeded to enter the top ten of most efficient units in respect to the consumption of utilities. However, all the investments we made are about to be offset by the additional costs and taxes imposed on the MWh. We believe that the energy consumers need an urgent measure to restructure these taxes in order to remain competitive”, added Nastase.


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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 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.



*The financial results for the year ending December 2012 are preliminary results and they do not include potential impairment of assets and are subject to further clarifications of the fiscal impact generated by the regulatory transition to IFRS. These might affect the final result of the Company.