The Romanian company said the wider loss is due to a decrease in the international aluminum prices and higher energy costs.
The net loss for the January-March period was of RON144 million, compared to a net profit of RON11 million, in the year-ago period. The adjusted net result is the company’s net result minus non-current assets impairment, plus/minus the loss/profit from derivative financial instruments that do not qualify for hedge accounting, plus/minus deferred tax.
Alro, which is owned by Dutch-registered Vimetco group, sad its sales revenue fell 2.1% to RON496 million, from RON507 million in the first quarter of 2013, despite increases in aluminum product volumes.
Sales of primary aluminum went up 6% compared to the similar period of last year and processed aluminum sales rose 14%, the company said in a news release. “However, the average aluminum price on the London Metal Exchange, which decreased to 1,708 $/ton in Q1 2014 from 2,003 $/ton in Q1 2013, offset the positive impact generated by the higher level of sales.”
The operating costs also went higher, mainly due increased expenses with raw materials, including the overcompensation scheme of the renewable energy sector, Alro said.
”The high energy costs, determined mainly by the eco-taxes and the low aluminum prices on the London Metal Exchange had a significant impact on the company’s net result. In order to offset the costs with energy consumption taxes, we continued and we will continue to pursue our long-term strategy, focused on increasing the output of higher value-added products,” said Marian Nastase, President of Alro’s Board of Directors.
“This strategy allowed us to counteract the unfavorable and fragile aluminum market. Moreover, we are confident that it will allow us to take advantage of any opportunities that arise once the aluminum market recovers.”
Alro is confident that effects of the overcompensation scheme for renewable energy sector on the major industrial consumers will be diminished following the adoption by the European Commission of the new guidelines on state aid for environmental protection and energy 2014-2020. Based on these guidelines, the energy-intensive companies might receive an exemption from the green certificate charges.
Alro is the largest electricity user in Romania, with 5% of the country’s overall consumption.
On the Bucharest market Thursday morning, Alro shares traded up 1.5%, outperforming the general market increase.