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Alro Announces Board of Directors No Longer Supports 2014 Budget

Thursday, 06/03/2014 - 10:25

Slatina, March 5, 2014 – Alro SA (BVB: ALR, "Alro" or "the Company"), one of the largest aluminum producers in Central and Eastern Europe, announces that due to the increased green certificate quota, the Board of Directors no longer supports the 2014 revenue and expenditure budget proposed for adoption at the General Shareholders' Meeting scheduled for March 7, 2014.

When drafting this year's budget, the Board of Directors considered a reduction in the cogeneration bonus and the burdensome green certificate taxes. However, on February 26, 2014, the green certificate quota that all consumers must pay increased to 0.224 CV/MWh, as per Order 12/2014 signed by the National Energy Regulatory Authority (ANRE). This quota must be paid by all energy consumers as part of the support scheme for renewable energy production in Romania. Market signals indicate that the speculative bubble in renewable subsidies will continue even more aggressively.

The increase in eco-taxes has been driven by new photovoltaic energy production capacities (a 2000% increase in the last year) and wind energy installations by the end of 2013. Major factors include the unpredictability of the renewable energy support scheme and a decline in the global aluminum market.

As a result, Alro will need to pay an additional 20 million lei for 2013 eco-tax adjustments, and the impact on the 2014 budget is expected to exceed the Company's current estimate by at least 80 million lei.

Furthermore, the lack of measures to support industrial consumers in line with guidelines proposed by the European Commission’s Competition Directorate-General forces Alro to reevaluate its operations for the year.

Thus, the Company must prepare a plan to temporarily shut down key primary aluminum production capacities, significantly reducing energy consumption.

These measures could lead to a substantial reduction in the Company's workforce, and discussions will be held in advance with social partners.

For more information, please contact:

Florenta Ghita
Premium Communication
Bucharest
Phone: +40 (0) 21 411 01 52
Email: florenta.ghita@premiumpr.ro 

Note for Editors:

Alro is a subsidiary of Vimetco N.V., a vertically integrated global producer of primary and processed aluminum. Alro is one of the largest aluminum producers in Central and Eastern Europe, with an installed production capacity of 265,000 tons per annum.

The main markets for Alro's products are the European Union (Hungary, Poland, Greece, Germany, and Romania). The Company also exports to the USA and Asia. The plant is ISO 9001 certified for quality management and holds NADCAP and EN 9001 certifications for its aerospace production units. Alro’s products meet the quality standards for primary aluminum set by the London Metal Exchange (LME) and international standards for flat-rolled products.

The content of www.alro.ro is not incorporated and does not form part of this announcement in any way.