“2019 proved to be quite turbulent for the aluminium industry. The international quotations of aluminium, specifically the LME, lost 350 USD per tonne on an average in the first nine months of this year, in comparison to the same period of 2018. International politics such as the US tariffs on imports, the Chinese retaliation, the Brexit negotiations, all these left room for uncertainties in the industry and reflected into a prudent behaviour of the aluminium customers and this was reflected in the results reported for the first nine months of 2019 for all major companies in the aluminium industry. On the local market, we have also faced adverse conditions, the overall costs increasing by 12%, mainly due to the growth of the purchase prices of utilities, namely electricity and gas, in line with their specific market prices, but with very high levels compared to other European countries”, said Marian NASTASE, Chairman of ALRO’s Board of Directors.
In this context, ALRO Group registered a net loss of RON 22.7 million, but managed to report a positive EBITDA of RON 233.6 million with increasing sales of processed aluminium products during the nine months of 2019 compared to the same period in 2018, and also in Q3 2019 versus Q3 2018, both in money and quantity terms.
Among the investments done, totally valued at RON 85 million in the first nine months of 2019, is the continuation of ALRO smelter replacing programme for increasing the energy efficiency, whereby ALRO put in operation several electrolysis pots based on AP12 LE technology (Aluminium Pechiney Low Energy) which are expected to have an impact on the quantity of energy consumed.
“One of the most important focus of ALRO Group is even a stricter control-costs which means the reduction of the raw materials and utilities rates, especially of the energy consumption”, said Gheorghe DOBRA, ALRO CEO. „On this purpose, at the end of 2018 the Group started to invest in the implementation of a new pot replacement methodology in the electrolysis sector of the primary aluminium division that will place ALRO in the top of the most energy-efficient smelters in the world.”
The Group reported a 12% higher level of the costs of goods sold in Q3 2019, compared to the same period of 2018 (Q3 2019: RON620,619 thousand versus Q3 2018: RON552,748 thousand), mainly due to the growth of the purchase prices of utilities (electricity and gas). The consolidated sales in the first nine months of 2019 were of RON2,162,353 thousand, a decrease compared to the level reported in the similar period of 2018 (respectively RON2,296,368 thousand). ALRO’s sales were of RON1,931,172 thousand in the first nine months of 2019 (9M 2018: RON1,985,271 thousand).
The Group’s net result for the first nine months of 2019 was a loss of RON22,721 thousand, compared to a net profit of RON223,535 thousand in the same period of 2018. ALRO reported a net loss of RON109,962 thousand opposed to a net profit of RON202,860 thousand in the same period of 2018. In the same period, ALRO Group registered a positive cashflow from operations, which generated RON98 million during Q1-Q3 2019 (during Q1-Q3 2018: RON 303 million).
During the first 9 months of 2019, the Group reported a total production of primary and processed products higher than in the same period of 2018. The same trend was noticed on a quarter level, with the company producing primary aluminium of 72,173 tons in Q3 2019 (Q3 2018: 68,742 tons) and processed aluminium of 24,589 tons in Q3 2019 (Q3 2018: 21,483 tons).
The companies part of ALRO Group are: ALRO S.A. – manufacturer of aluminium, Alum S.A. – producer of alumina, Sierra Mineral Holdings I, Ltd. – bauxite mining, Vimetco Extrusion S.R.L. – extrusion business line, Conef S.A. – holding and management company, Global Aluminium Ltd. – holding company and Bauxite Marketing Ltd – marketing. Having this structure, the Group created an integrated production chain assuring the raw materials for ALRO.
ALRO S.A. reported a net loss of RON109.9 million in the first nine months of 2019, compared to a net profit of RON202,8 million in the same period of 2018, due to higher costs for raw materials and electricity, while its turnover reached RON1.93 billion in the mentioned interval, lower by RON54 million than in January-September 2018.
ALRO is 54.1% owned by Vimetco Group, controlled by Russian billionaire Vitali Matsitski, while Paval Holding, held by Paval brothers, the owners of do-it-yourself retailer Dedeman, owns a 23.2% stake. Investment fund Fondul Proprietatea is the third largest shareholder, holding 10.2% of ALRO’s share capital.
ALRO has a market capitalization of RON1.6 billion.