Alro-Alprom group's H1 cumulated net profit amounted to 780 billion ROL (23 million dollars), only 2.5% higher in nominal terms as compared to the corresponding period of last year. During the same period, the inflation rate revolved around 14%.
Alprom is 85% held by Alro. The two companies are slated to merge through absorption. Alro is the only producer of primary aluminium in Romania, while Alprom processes the aluminium produced by Alro.
Alprom has managed to double profit in the first half, to 25.7 billion ROL, up from merely 12.4 billion ROL in the year-ago period. However, Alro did bring the largest contribution to net income, with net gains of 754 billion ROL, similar to the results recorded in the same period of last year.
The international aluminium quotations are on a slightly ascending trend, after the lows registered at the end of 2001. Thus, prices reached 1,500 dollars/tonne in London this month, whereas a tonne of aluminium was being sold for 1,280 dollars last year. However, this price increase in dollars was not fully felt by the Romanian companies operating in this sector, because the US dollar's growth was outpaced by inflation.
Alro's constant level of profit was triggered by a slight drop in the core revenues, which came to 5,127 billion ROL (155 million dollars) in the first half. However, the company's turnover plunged (minus 13%), because Alro sold less than it produced. Deliveries were 8% smaller as compared to last year, whereas output actually posted a 3% increase.
Turnover also dropped because the bauxite deliveries to Alum Tulcea were halted. The Tulcea-based company (one of Alro's main suppliers) uses bauxite to produce alumina, the raw material Alro needs. The aluminium plant last year financed Alum's bauxite imports, but funding was suspended because of Alum's piling debts. Early this year, the market was ripe with rumours about a possible merger between Alro and Alum, a company controlled by US trade company Balli, but officials of trading company Marco said they were no longer interested in the deal.
Alprom's sales of laminated products and aluminium alloys posted a 1,320bn ROL ($40 million) increase, up 50% since the year-ago period. About 70% of Alprom's output is exported.
The two companies' combined H1 turnover was worth almost 6,100 billion ROL (185 million dollars), but turnover of the future company will probably be smaller, since Alprom is one of Alro's main customers. Following the merger, the two companies will benefit from a cut in operating costs and more negotiating leverage for the sale prices.
vlad.nicolaescu@zf.ro
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