Revenues in 2021 may exceed PLN 2 billion at current product prices, says CEO of Alumetal Group

Europe’s one of the biggest, most modern and constantly developing manufacturers of secondary aluminium casting alloys and primary alloys, Alumetal has confirmed from the beginning of the Q4 2020, the metal company is hopeful about the market situation, which has developed an impact on the level of financial results achieved in the Q1 2021. However, the improvement of financial results is influenced not only by the market situation but also by the permanent changes in the company itself and investments realization, as stated by Agnieszka Drzyżdżyk, CEO of Alumetal.

“2021 started very well for us. In the first quarter of this year, we increased the sales volume by approx. 30%, which we informed the market in the current statement on 25^th February 2021. Currently, we estimate the share of Alumetal in the European market of secondary aluminium casting alloys at over 8% and we are the second-largest aluminium refiner in Europe. In the Q2 2021, the market situation is still very promising, we are selling a large number of products with high margins,” said CEO Drzyżdżyk

She also highlighted: "At the end of Q4 2020, the modernization of the production plant in Kęty has been accomplished. From the beginning of January this year the level of production on the new production line has reached full capacity utilization. The plant upgrade also significantly improved unit processing costs and productivity per employee. The plant in Kęty is now our largest production plant, and the improvement in the efficiency of its operation had a noticeable impact on the results of the entire Alumetal Group.”

Since the beginning of 2021, the European automotive industry, which is the main recipient of the Alumetal Group's products, has been experiencing shortages in supply chains, especially in the case of semiconductors, which halted some car assembly factories for several weeks, Agnieszka Drzyżdżyk explained.

She further added: “Were it not for this type of disturbance, the demand for our products would probably be even higher. However, this situation means that some of the demand has shifted to the following quarters. We receive information from our clients that orders for cars are at a high level and they expect strong production levels in the second half of this year. Of course, such a market environment will support the volume of sales and the financial results achieved by Alumetal.”

The coming weeks are expected to bring decisions regarding significant orders for Q3 2021.

"We have a feeling that consumers of secondary aluminium alloys want to contract large volumes during this period," said the CEO.

In January 2021, the benchmark margin reached a record level of € 618 / t. In the following months, the market margin gradually decreased but is still significantly above the long-term average market margin. In April 2021, the margin was € 413 / t, 20% above the ten-year average.

"The level of market margins significantly above the long-term average is a harbinger of good results in the 2nd and 3rd quarter of this year." - pointed out the Agnieszka.

“I am full of optimism. We are stronger, not only financially, but also operationally and personally. Already this year, we should get closer to our strategic goal - sales of 250 thousand tonnes in 2022 Demand for our products is high, and prices are also much higher than what we have seen historically. If the situation continues, the revenues will exceed PLN 2 billion. In addition, sales of pre-alloys have also accelerated since the beginning of the year. Thanks to the high quality of these products, we gain new customers and build market share,” commented the President of the Management Board, Alumetal, Agnieszka Drzyżdżyk.

The President in her opinion said that changes in the automotive market favour the Alumetal Group. The reallocation of motor vehicle production to the CEE5 region (Poland, Czech Republic, Slovakia, Hungary and Romania) is still ongoing. The share of CEE5 in vehicle production in the EU and UK increased from 23% in 2019 to 25% in 2020. Hybridization and electrification of vehicles also create opportunities for the company. Hybridization is conducive because there is an additional motor and battery housing for production to which secondary aluminium can apply. Electrification also offers development potential for the CEE5 region. Tesla's new investment, even though it is located less than 100 km from the Polish border in Germany, will also benefit Polish co-operators.

The CEO also mentioned an element to keep in mind is the pursuit of climate neutrality in the automotive industry, which naturally means a shift to secondary aluminium, which requires 20 times less energy than secondary aluminium.