Alro concluded the negotiations for electricity price

Tue, 06/04/2010 - 00:00

• Hidroelectrica will supply three TWh/year to the aluminium producer until 2018
• The price of the electricity has currently increased by approx 25%
• The long term contract offers predictability and contributes to the implementation of the Group’s development strategy for Romania

Slatina, 2nd April 2010 - Alro SA, (BSE: ALR), the biggest aluminium producer in Central and Eastern Europe, concluded negotiations with Hidroelectrica for the electricity supply of three TWh/year until 2018. Alro is using the entire quantity of energy for the production process and for the current activity of the Group in Romania.

“The supply contract for electricity consolidates the predictability of the business and allows us to further implement the development programme, as part of an integrated aluminium producer”, said Frank Mueller, CEO Vimetco. “It will offer Alro the basis to secure its own aluminium production in Romania and to further develop the production of higher added value products in Slatina. This, along with securing the alumina supply for Slatina via Alum Tulcea, gives Alro a good platform to continue production with long term, reliable conditions. We are now confident in our long term plans for producing aluminium in Romania. We will continue to carefully monitor the international market to ensure we continue taking the best decisions for maintaining the viability of the company.”

As a result of negotiations, the two parties agreed on a formula for the electricity price, considering a series of factors, including the aluminium price at the London Metal Exchange. As a result, at this point, the current price that Alro is paying for electricity has increased by 25%. Despite the increase, the Company considers that the current contract offers predictability of costs and contributes to the long term development of the smelting activities in Romania.

In 2009, the Company reported a preliminary net profit of RON 93.6 million (approx USD 30.7 million), and a turnover of RON 1.41 billion (USD 462.5 million)1, according to the preliminary unconsolidated financial results.
 
The financial results for 2009 reflect the cost reduction strategy implemented by the Company throughout the financial year. Alro continued the programmes for the reduction of consumption of raw materials, energy and gas and renegotiated the contracts with part of its suppliers. Moreover, Alro continued to focus on core activities and on increasing productivity. As a result of the reduction in production, Alro is now using 3 TWh of electricity for producing aluminium.

Notes

1.    The financial results do not include potential charges for impairment of assets. The final impairment analysis might impact the net profit

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 SA is subsidiary of Vimetco, a global, vertically-integrated primary and processed aluminium producer. Alro is the largest aluminium production facility 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 SA are within the EU (Hungary, Poland, Greece, Germany and Romania). The Company also exports to the US and Asia. Alro is ISO 9001 certified for quality management and has NADCAP as well as EN 9100 certificate for aerospace production organizations, its products respecting the quality standards for primary aluminium on the London Metal Exchange – LME, as well as the international standards for flat rolled products.