Alro announces financial results for the nine months ended 30 Sept '13

Alro SA,one of the largest aluminium producers in Central and Eastern Europe, announces today its financial results, in accordance with the International Financial Reporting Standards (IFRS), for the nine months ended 30 September 2013.The Company reported in 9M 2013 a net adjusted loss* of RON 21 million, compared to a net adjusted profit of RON 83 million (restated), in 9M 2012. The turnover for first nine months in 2013 was of RON 1.55 billion, compared to RON 1.74 billion, in 9M 2012.

“The financial results continue to be significantly impacted by the continuous downturn of the international aluminium market, and by the local eco-taxes”, said Marian Nastase, President of the Board. “Although we took all the necessary measures to increase the efficiency of the operations, the mentioned external factors kept us in the red zone. However, we are committed to pursue our long-term development strategy, focused on higher added value products, and we are ready to make all efforts to safeguard our business”.

The sales of primary aluminium stood at nearly the same level as the one reported in 9M 2012, respectively of approx 107,000 tonnes, while the sales of processed aluminium increased to 53,400 tonnes in 9M 2013 from 48,400 tonnes during the similar period of 2012. The overall quantity increase of the Company processed products was of 10% for the first three quarters of this year. This increase did not reflect in the value of the sales, as the aluminium price on the London Metal Exchange continued to decrease significantly in 2013, reaching an average of USD 1,871 per tonne in 9M 2013, compared to an average of USD 2,025 per tonne of aluminium in the similar period of 2012.

Besides the low quotation of the metal, Alro continued to confront itself with local factors outside its power of decision, namely the overcompensation of the renewable energy.

Thus, the costs of goods sold increased by RON 23.8 million in 9M 2013, compared to the similar period of 2012, mainly because of the increase in taxes on energy (green certificates and cogeneration tax). The annual quota for green certificates was up to 0.191 GC/MWh from 0.1188 GC/MWh in 9M 2012.

However, during this period, Alro continued to focus on expanding the marketing activities on international markets for high added value products. During the first nine months of this year, Alro invested for increasing the competitiveness of the plant. The investments also focused on long term assets, aiming at developing the processed aluminium sector. Moreover Alro continued to invest in processing the aluminium scrap to save energy costs, in order to counteract the effect of the latest dramatic increase of the energy consumption taxes.

* The net adjusted profit/(loss) represents the net profit/(loss) of the Company plus/(minus) fixed assets impairment, plus/ (minus) the loss/(gain) from derivative financial instruments that do not qualify for hedge accounting, plus/ (minus) deferred tax.