Debt deal helps Bosnia's Aluminij return to profit in first-half

Bosnian aluminium smelter Aluminij Mostar returned to profit in the first half after a deal to settle debts helped it stabilise production.

The smelter, which is due to be privatised, reported first-half profit of 7.5 million Bosnian marka ($4.3 million) compared with a loss of 49.1 million marka for the whole of 2014. It did not provide figures for the first half of last year.

Aluminij, which is among Bosnia's top exporters, has narrowly avoided closure several times over debt that hit 230 million marka last year. But a debt settling deal arranged last September by the government of Bosnia's autonomous Bosniak-Croat Federation with state-owned power board EPHZHB has enabled it to stop accumulating new debt and stabilise production.

Like other smelters across the world, Aluminij has been hit by high electricity prices and a sharp fall in aluminium prices caused by oversupply. The Federation government in June announced it would soon offer for sale its 44 percent stake in the company, based in the southern town of Mostar, to help cover a budget deficit. Small shareholders own another 44 percent and Croatian aluminium producer TLM holds 12 percent.

Aluminij produces around 160,000 tonnes of aluminium a year and has annual exports worth around 150 million euros ($171.51 million).

($1=1.729 Bosnian marka)