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ALRO
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Press Releases
Press Releases

ALRO Continues Energy Efficiency Investments with Support from a USD 40 Million 7-Year Loan from the Black Sea Trade and Development Bank

Friday, 14/05/2021 - 08:22

  • Higher Sales by 4.4% in Q1 2021 Compared to Q1 2020, Despite a Challenging Global Economy Facing the Effects of the COVID-19 Pandemic
  • Consolidated positive EBITDA of 33.5 million RON in Q1 2021, compared to a negative EBITDA of 30.6 million RON in Q1 2020.
  • Positive net cash flows from operational activities totaling 21 million RON in Q1 2021.
  • Investments played a key role in Q1 2021: The AP12LE project reached 100 upgraded pots, and Vimetco Extrusion, ALRO's downstream subsidiary, started a 10 million EUR project.

Slatina, May 14, 2021 - ALRO S.A. (BVB: ALR, “the Company” or “ALRO”), one of the largest vertically integrated aluminum producers in Europe by production capacity, announced today the consolidated results for Q1 2021. The Group’s revenue increased by 4.4% to 744 million RON in Q1 2021 compared to 712 million RON in Q1 2020, despite difficult market conditions caused directly by the COVID-19 pandemic. ALRO Group reduced its net loss to 62 million RON in Q1 2021 from 110 million RON in Q1 2020.

“In the first three months of 2021, we witnessed a slight recovery in the international business environment, with demand entering an upward trend, while aluminum prices continued to record higher quotations,” said Marian NĂSTASE, Chairman of ALRO’s Board of Directors. “This situation was reflected in better sales values for ALRO, partially mitigating the difficult context for the bauxite and alumina segments, allowing the Group to report a positive EBITDA of 33.5 million RON. Additionally, we continued our investment program aimed at reducing energy consumption and overall production costs, along with our crisis plan for cost control, which focuses on increasing savings and optimizing operations. As a result, we reached 100 electrolysis pots upgraded with AP12LE technology, with energy consumption lower than initially estimated. These measures helped us remain fully operational and competitive despite the challenging times the global economy is facing.”

COVID-19 and Market Analysis

In Q1 2021, the LME average rose to 2,096 USD/ton from an average of 1,690 USD/ton in Q1 2020. Overall, demand levels were stable, supported by good performance in the automotive and construction sectors, limited supply, the EU’s anti-dumping duties on extruded products from China, and the announcement of duties for flat-rolled products from China, as well as the fact that end-users began replenishing their stocks.

While the COVID-19 crisis continued to impact the business environment, ALRO Group managed to operate normally, safely, and maintain a fully operational supply chain due to the complex measures implemented at the start of the health crisis.

Financial and Operational Analysis

In Q1 2021, ALRO Group’s sales increased by 4.4% compared to Q1 2020, primarily due to the improvement in aluminum prices and higher volumes sold for both the primary and processed segments. The increase in primary aluminum sales was driven by the wire segment, which saw an increase of over 1,300 tons. With the construction and automotive sectors showing signs of improvement, demand for bars remained at similar levels to last year. Processed aluminum sales also saw a 4% volume increase compared to Q1 2020, driven by the above sectors and the EU’s anti-dumping tariffs on aluminum products from China. The increased sales volumes led to higher sales values, with an 11% increase for the primary segment and a 3% increase for the processed aluminum segment.

The improvement in sales, combined with the cost control program and energy efficiency investments, resulted in a positive EBITDA of 33.5 million RON in Q1 2021, compared to a negative EBITDA of 30.6 million RON in Q1 2020. The Group’s gross profit reached 64.9 million RON in Q1 2021, compared to a gross loss of 2.8 million RON in the same period of 2020. However, currency exchange rate differences partially impacted the net result, with the Group reporting a net loss of 61.9 million RON in Q1 2021, an improvement compared to the net loss of 110 million RON recorded in Q1 2020.

Despite intense competition in the aluminum plate market (mainly from top-tier suppliers), ALRO remained a key player in Q1 2021, securing new contracts for both heat-treated and non-heat-treated plates at a reasonable level, partially offsetting the lower demand from the aerospace sector in Q1 2021.

Investments and Key Projects

Investments were a key element in Q1 2021, with the company’s main project, AP12LE, continuing despite challenges faced by suppliers involved in this complex project. As of March 31, 2021, ALRO had upgraded 100 electrolysis pots with this innovative technology since the start of the project, with 22 additional pots commissioned in Q1 2021 and another 22 in an advanced stage of modernization. Additionally, Vimetco Extrusion, ALRO’s downstream subsidiary, will invest approximately 10 million EUR in a completely new aluminum profile extrusion line, expected to be operational by September 2022. The new 7’’ extrusion line is equipped with the necessary technology to operate with minimal human intervention, with the entire process automated and featuring one of the lowest gas consumption rates on the market.

These financial results are available in a separate document on the company’s website under the Investor Relations section, Reports.

 

For more information, please contact:

www.alro.ro

Florența Ghiță

București

Telefon: +40 744 644 004

E-mail: investor.relations@alro.ro  

 

ALRO Group Overview

The companies in the ALRO Group include ALRO S.A. (aluminum producer), Alum S.A. (alumina producer), Sierra Mineral Holdings I, Ltd. (bauxite extraction company), Vimetco Extrusion S.R.L. (extruded aluminum producer), Conef S.A. (holding and management company), Global Aluminium Ltd. (holding company), and Bauxite Marketing Ltd. (marketing company). This structure allows the Group to create an integrated production chain, ensuring raw materials for ALRO.

ALRO

ALRO is a subsidiary of Vimetco N.V., a vertically integrated global primary and processed aluminum company. ALRO is one of Europe’s largest vertically integrated aluminum producers by capacity, with an installed production capacity of 265,000 tpa, 35,000 tpa of recycled aluminum, and 335,000 tpa of cast aluminum.

ALRO's main markets are the European Union, with exports to the U.S. and Asia. The plant is certified with ISO 9001 for quality management and holds NADCAP and EN 9100 certifications for aerospace production units.