ALRO S.A., one of the largest vertically integrated aluminium producers, by capacity, in Europe, announces today its consolidated financial results for the first half year of 2018. ALRO Group registered a net profit of RON 154 million, in H1 2018, compared to a net profit of RON 187 million, in H1 2017. The Group’s turnover increased in H1 2018 to RON 1.56 billion, compared RON 1.38 billion, in H1 2017.
“We continued to consolidate our position on the international markets, in the first half of this year, as well, while focusing on our investment programme to increase the product quality and range, altogether with cost control measures implementation”, said Marian Năstase, Chairman of the Board of Directors of ALRO.
“The first half of 2018 was characterized by a positive context on the international markets, with constant increase in aluminium quotations. The higher demand and output were offset, however, by other market factors, such as the depreciation of the foreign exchange quotation and higher raw material costs which impacted the whole European market. ALRO’s long term strategy of cost control and focus on operational efficiency showed its results, limiting the negative impact on the financial results and helping the Company to deliver profit for its shareholders” added Năstase.
In the first half of 2018, ALRO Group focused its sales on high and very high value-added products both in primary and in the processed segment. Thus, in the supply of wire rod and cables registered higher sales, while the sales of processed aluminium products stood at the same level with the one registered in H1 2017, the Company securing its customers of sophisticated products. The primary aluminium sales reached 67,000 tonnes, in H1 2018, from 62,000 tonnes, in H1 2017, while processed aluminium sales stood at 56,000 tonnes.
In H1 2018, the LME average quotation reached 2,209 USD /tonne, as compared to 1,880 USD/tonne, in H1 2017. As a result of an improved aluminium market, total sales reached RON 1.56 billion in H1 2018, compared RON 1.38 billion, in H1 2017. However, the higher costs with raw materials, along with the depreciation of Romanian Leu impacted the result for the period, ALRO Group registering a profit of RON 154 million, in H1 2018, compared to RON 187 million, in the first half of 2017.
The Group continued in H1 2018 to implement its strategy to increase product range and quality, together with reducing costs and improving overall efficiency. The investment programme focused on reducing ALRO’s specific consumption, increasing the quality of the hot rolled products, improving the current equipment efficiency and increasing the overall ALRO competitiveness. The Company’s Investment Programme approved for the entire year was of USD 61 million and in H1 2018, ALRO alone, made capital expenditures amounting to over USD 33 million (RON 127 million) in Slatina alone in strategic projects, such as the upgrading the electrolysis pots, a medium-term programme that will result in the reduction of the specific energy consumption, while maintaining the same production/pot/day.
The Company also invested in expanding its customers’ portfolio. It focused on research projects for high qualification industrial applications, on improving the aluminium hydroxide technology, which are co-financed by the European Fund for Regional Development, by the Competitiveness Operational Program 2014-2020 and on replacement of some of the existing equipment in order to sustain the level of the budgeted production.
At the end of H1 2018, ALRO’s majority shareholders announced the launching of a Secondary Public Offering with the main objective to increase the Company’s free float on the Bucharest Stock Exchange, to better reflect the underlying value of the business in ALRO’s share price. However, due to an adverse market climate, later on, the Company announced that the conditions for a successful closing of this public offering of shares have not been met. However, ALRO remains committed to its long-term development programme and to its strategy to consolidate the Company’s position on the international market, while developing new products and entering new markets and will continue to act in the best interest of its shareholders.