Romania’s only manufacturer of alloy aluminium products turns on profit in 2015

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Alro Slatina, the only producer of primary and alloy aluminium products in Romania and the biggest aluminium producer in Central and Eastern Europe, registered a preliminary adjusted net profit of RON 85 million in 2015, compared to an adjusted net loss of RON 134 million, in 2014, a press release informs.

At the same time, the turnover of increased to RON 2.3 billion, from RON 2 billion, in the previous year.

“The investments of over USD 550 million in the past 11 years helped us consolidate and expand the products portfolio, reduce the specific consumptions and the total costs. Also, the adjustment of the support scheme for the renewable energy has the role of eliminating the distortions our industry has faced, allowing us to compete fairly with other companies in this industry”, Gheorghe Dobra, General Manager of Alro said.

Last year, the international aluminium market continued to drop significantly, with major impact on the prices. If the minimum of 2014 was of USD 1,642 per tonne, in 2015, the minimum was below USD 1,440 per tonne, registered in November. In its turn, 2016 didn’t bring any recovery in the aluminium price either, the quotation staying below the level of USD 1,550 per tonne.

„Considering this difficult context, Alro’s cash flows were further impacted by the obligation of acquiring the full quota of green certificates for 2014, which happened in Q1 2015. This was financed through a short-term loan, out of which 75 percent had already been reimbursed by 31 December 2015,” the release reads.

Moreover, the raw materials costs decreased thanks to the scrap aluminium recycling facility. About 10 percent of the primary aluminium produced at Alro is from recycled scrap. For this type of aluminium, the energy consumption is 90 percent lower than the level necessary for producing electrolytic aluminium. Also, Alro continued to focus on the development of high processed aluminium, for which the margins are superior.

Last year, the total production of primary aluminium was of 271,000 tonnes, increasing from 263,000 tonnes, registered in 2014. The processed aluminium production was close to 79,000 tonnes, compared to 78,000 tonnes, in 2014.

Under these circumstances and as a result of the appreciation of the USD compared to RON, Alro’s sales increased in value by 15 percent, in 2015, compared to 2014. As a consequence, the gross margin of Alro increased at 15 percent, in 2015, compared to 8 percent, in 2014. Alro registered an EBIT of approx. RON 198 million, compared to RON 32 million, in 2014. The net profit of the company was of RON 9.6 million, in 2015, compared to a net loss of RON 109 million, registered in 2014.

Last year, Alro also secured the necessary investment funds, signing a loan facility with Black Sea Trade and Development Bank, of USD 60 million, out of which USD 15 million were already invested in the company in 2015.


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