AMG Superalloys UK reports increased profit in 2016 despite unfavourable conditions

AMG Superalloys UK, A Rotherham based metals manufacturing business and a business unit of AMG Advanced Metallurgical Group N.V. has reported increased earnings and profit despite a turbulent year.

AMG Superalloys is a leading producer and supplier of specialty metals, alloys, and materials including aluminium products.  The company is a highly specialized manufacturer of specialty products to the aluminum, steel, superalloy and glass industries. 

Though revenue dropped by 6 per cent from £132.3m in 2015 to £124.2m in 2016, EBITDA registered an increase to £9.7m, up from £6.1m. Profit before tax for the company rose to £8.1m from £3.4m.

The increase in bottom line profit was primarily driven by a combination of higher sales volume, improved product mix and internal cost improvement measures.

In the wider chrome metal market, prices continued to drop in 2016 due to a surplus in commodity grade Russian material and slow demand in the oil and gas sector. Though overall sales volumes increased by 31 per cent profit dropped due to low pricing.

In the aluminium segment, sales revenues dropped in 2016, partly due to the fall in aluminium prices in the London Metal Exchange and also due to reducing conversion premiums. The average LME aluminium price in 2016 was $1,605 per tonne compared to $1,660 per tonne in 2015.

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Profitability was also negatively affected by the strengthening of the euro versus the US dollar which made domestic raw materials costly and exports cheaper. The business also had to pay a hefty fine in relation to employee safety. Despite the unfavourable conditions, AMG Superalloys managed to report improved results in 2016.