Alro Slatina, a producer of primary aluminium, reported an income worth 24.1m euros (79.4m RON), in the second quarter of this year, 25% down (in euros) against the same period last year. The company's turnover also registered a 1.3% decline and dropped to 0.15bn euros (0.51bn RON).
However, the situation for the overall first-half was visibly more solid. After the first quarter, when the company reported a record high income of 47m euros (160m RON), the next three months saw the growth rate slow down. However, against the first six months of last year, H1 income advanced by 21% to 72.3m euros (238m RON), while the turnover increased by 4% (in euros) to 0.33bn euros (1.1bn RON).
"Alro's H1 financial results were generated by the company's development strategy, which centred on the expansion of production capacities, with a focus on the delivery of high added value products, which are witnessing a constant rise in demand," says Christian Wuest, chairman of Alro, in a report on the financial results released by the company.
In fact, the strong Q1 increase was explained back then by the fact that Alro stopped retailing raw aluminium and started selling more processed products. As a result, the aluminium producer witnessed rising sales premiums and implicitly higher profit margins.
Over the same period, Alro benefited from the increase in prices, per tonne, of aluminium on international markets. "We benefited from a constant demand for aluminium, whilst the international markets maintained a positive trend in the first half of this year.
The price of aluminium on the London Metal Exchange averaged at 2,800 dollars/tonne in H1, 2007, against the average of 2,500-2,600 dollars/tonne in the same period last year," added Wuest.
Alro boosted its level of aluminium production by over 9,000 tonnes in the first-half, but reduced its quantity of processed products by around 10,000 tonnes.
The iron and steel plant at Slatina has a production capacity of around 260,000 tonnes of aluminium and consumes over 7% of overall energy used in Romania.
In the first six months of this year, the plant invested 25m dollars in technology and environmental protection. The level of investments operated since 2002 amounts to $150m.
In 2006, Alro reported an income worth 107m euros (380m RON) and a turnover worth 622m euros (2.19bn RON).
At the beginning of the year, the company was reserved with regards to estimates, and forecast a 5% decline in turnover for 2007 and targeted an income close to the net figure registered in 2006.
In addition, Alro has started a process of vertical integration and plans to reduce production costs.
The company has already acquired the Alum Tulcea alumina plant and Alprom Slatina aluminium profiles maker.
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