Alro registered an adjusted net profit of 94 million RON in the first nine months of 2016
Tue, 15/11/2016 - 09:35
Financial and Operational Data:
- Revenue: 1.58 billion RON, compared to 1.77 billion RON in Q1-Q3 2015
- Sales volume growth: 4%
- Primary aluminum production: 205,400 tons, compared to 203,100 tons
- Processed aluminum production: 57,500 tons, compared to 59,800 tons
Slatina, November 15, 2016 – Alro S.A. (BVB: ALR, “the Company” or “Alro”), the largest aluminum producer in Continental Europe (excluding Russia and Scandinavia), recorded an adjusted net profit of 94 million RON in the first nine months of 2016, compared to 145 million RON in the same period of 2015. The Company’s revenue was 1.58 billion RON, compared to 1.77 billion RON in Q1-Q3 2015.
"Alro's financial results for the first nine months of this year demonstrate the stability of our business and strategy, which allow us to remain profitable in a volatile industry," said Marian Năstase, Chairman of Alro’s Board of Directors. "We have continued to focus on improving product quality and production mix, while also implementing cost-reduction measures. Furthermore, once the distorted electricity taxation was eliminated, we were able to direct efforts towards technological improvements, targeting new markets for our products."
The international aluminum prices significantly impacted the Company’s financial results, resulting in lower sales value despite increased sales volume. The average aluminum price on the London Metal Exchange (LME) was USD 1,570/ton in Q1-Q3 2016, compared to an average of USD 1,717/ton in the same period of 2015. Under these conditions, sales revenue was 1.58 billion RON, compared to 1.77 billion RON in the same period in 2015. Alro recorded a net profit of 63.8 million RON in the first nine months of 2016, compared to 72.7 million RON in Q1-Q3 2015.
Alro increased sales volumes by 4%, mainly due to higher bar sales (up by 15,000 tons compared to 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 its investment program in operational efficiency and reducing specific consumption. In September, the Company launched a project co-financed by the European Regional Development Fund, aimed at research and development investments to improve research infrastructure for heat-treated aluminum alloy plates for high-end industrial applications.
The cost of goods sold decreased by 74 million RON, from 1.45 billion RON in the first nine months of 2015 to 1.38 billion RON in Q1-Q3 2016, benefiting from the downward trend in raw material prices, positively impacting gross profit.
The Company’s primary aluminum production was 205,400 tons, compared to 203,100 tons in the first nine months of 2015, while processed aluminum production was 57,500 tons, compared to 59,800 tons in Q1-Q3 2015.
Alro will continue to invest in technological modernization and operational efficiency improvement. The 2016 investment program includes increasing the processing capacity of the Eco-Topitorie facility to 90,000 tons per year, up from 60,000 tons per year. Moreover, the Company continued its program to enhance efficiency in the electrolysis sector, reduced industrial water consumption, and upgraded its energy dispatch system. These measures are part of Alro's energy efficiency plan, approved by an accredited energy efficiency auditor and notified to the relevant authorities.
Thanks to investments made over the last 10 years, Alro has achieved 99% of the maximum possible efficiency in the electrolysis sector. The study "Energy Efficiency and Greenhouse Gas Emissions: Possible Scenarios for the Aluminum Industry," published last year by the Joint Research Center at the request of the European Commission, recognizes the Company’s achievements, noting that Alro has implemented three out of four possible phases for optimizing the electrolysis process, ranking fourth among 18 plants in Europe.
In 2016, Airbus, a major aircraft manufacturer, selected Alro as an aluminum supplier. The agreement spans several years, starting in 2017. Under the contract terms, Alro will supply flat-rolled aluminum products for aircraft manufacturing.
Alro holds NADCAP performance certification (National Aerospace and Defence Contractors Accreditation Programme) for compliance with aerospace industry requirements. This certification was granted by the NADCAP Management Council in accordance with the SAE Aerospace Standard, AS 70003, following testing of aluminum alloys produced at the Slatina plant, including heat treatment, conductivity measurement, tensile testing, hardness, and metallography.
The financial results are available in a separate document on Alro S.A.’s website: www.alro.ro
Note: Adjusted net result represents the net result plus/(minus) expense/(income) from asset depreciation, plus/(minus) loss/(gain) from derivative financial instruments that do not qualify for hedge accounting, plus/(minus) expense/(income) from deferred income tax.
For more information, please contact:
Florenta Ghiță
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., an international producer of primary and processed aluminum, vertically integrated. Alro is the largest aluminum producer in Continental Europe (excluding Russia and the Scandinavian Peninsula), with an installed production capacity of 265,000 tons per annum.
The main markets for Alro's products are the European Union (Germany, Hungary, Poland, Greece, and Romania). The company also exports to the USA and Asia. Alro is certified according to ISO 9001 for quality management and holds NADCAP and EN 9100 certifications for its aerospace production units, as well as ISO TS 16949 certification for automotive production. Its 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 the website www.alro.ro is not incorporated and does not form part of this announcement in any way.