Alro reports an adjusted net profit* of RON 94 million, in the first nine months of 2016

Tue, 11/15/2016 - 09:33

Financial and operational highlights

  • Turnover of RON 1.58 billion, as compared to RON 1.77 billion in Q1-Q3 2015
  • Increased sales volume by 4%
  • Primary aluminium production of 205,400 tonnes, from 203,100 tonnes
  • Processed aluminium production of 57,500 tonnes, from 59,800 tonnes

Slatina, 15 November 2016 – Alro SA (BSE: ALR, “The Company” or “Alro”),the largest aluminium producer in Europe (except for Russia and Scandinavia), registered an adjusted net profit* of RON 94 million in the first nine months of 2016, compared to an adjusted net profit* of RON 145 million in the similar period of2015. The Company’s turnover was of RON 1.58 billion, compared to RON 1.77 billion in Q1-Q32015.

“Alro’s financial results for the first nine months of this year are another proof of the soundness of our business and strategy, that allows us to remain profitable in a volatile industry”, said Marian Nastase,Chairman of the Board of Alro. “We kept our focus on increasing the quality of our products and of the output mix, while implementing measures for reducing the overall costs. Moreover, once the tax distortion on electricity was eliminated, we could focus our efforts towards improving our technology, while targeting new markets to export our production”.

The aluminium quotation on the international markets significantly impacted the financial results of the Company, generating lower sales value, despite higher sales volume. The average aluminium price on the London Metal Exchange (LME) was of 1,570 USD/tonne, in Q1-Q3 2016, compared to an average of 1,717 USD/tonne in the first nine months of 2015. Under these circumstances, the sales revenue stood at RON 1.58 billion, compared to RON 1.77 billion in the same period of 2015. Alro’s net profit stood at RON 63.8 million in the first nine months of 2016, compared to RON 72.7 million in Q1-Q32015.

Alro increased its sold quantities by 4%, mainly thanks to higher sales of aluminium billets (15,000 tonnes more than during the same period of 2015), as part of the Company’s strategy to focus on high and very high value added products. Additionally, Alro continued the investments programme in its operations efficiency and in reducing the specific consumptions. In this direction, Alro started in September a project co-funded by the Regional Development European Fund, which involves investments in the R&D Department aiming at improving the research infrastructure for the aluminium alloy heat treated plates with high qualification industrial applications.

In terms of cost of goods sold, it dropped by RON 74 million, from RON 1.45 billion in the first nine months of 2015, to RON 1.38 billion in Q1-Q3 2016, Alro succeeding to capture in its gross profit the decreasing trend of the price of its inputs.

The Company’s production of primary aluminium stood at 205,400 tonnes, from 203,100 tonnes in the first nine months of 2015, and the production of processed aluminium reached 57,500 tonnes, from 59,800 tonnes, in Q1-Q3 2015.

Alro will continue the programme of technology upgrade and increase of operational efficiency.The investment program for 2016 includes the increase of scrap processing capacity of Eco Cast House, to reach a capacity of 90,000 tonnes per year, up from 60,000 tonnes/year. Moreover, the Company continued its programme to increase efficiency in the electrolysis sector, reducing the industrial water consumption and upgrading the energy control room of the plant. The measures, part of Alro’s energy efficiency plan, were agreed with the accredited energy efficiency auditor and notified to the competent authorities.

Thanks to the investments made over the last 10 years, Alro has reached 99% of the maximum possible efficiency of the electrolysis sector. The study "Energy Efficiency and Greenhouse Effect Emissions: Possible Scenarios for the Aluminium Industry," published last year by the Joint Research Center, at the request of the European Commission acknowledges the results the Company registered, emphasizing that Alro has implemented three out of four possible phases for optimizing the electrolysis process and was ranked fourth among 18 plants in Europe.

Moreover, in 2016, Airbus, the leading aircraft manufacturer selected Alro as a provider for aluminium. The agreement is for a multi year period, starting 2017. Under the terms of the Contract, Alro will supply Aluminium Flat Rolled Products for aircraft manufacturing.

Alro holds the NADCAP (National Aerospace and Defence Contractor Accreditation Programme) performance certification for conformity with aerospace industry requirements. The certificate was awarded by the NADCAP Management Council, in accordance with SAE Aerospace Standard AS 70003, following the testing of aluminium alloys produced at Slatina for heat treatment, conductivity measurement, tensile testing, hardness and metallography.

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

*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. 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.

For further information please contact:

www.alro.ro

Florenta Ghita

Premium Communication

Bucharest

Phone +40 (0) 21 411 01 52

Email florenta.ghita@premiumpr.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.

The contents of the website www.alro.roare not incorporated into, and do not form part of, this announcement.