Falling business for Alro Slatina, in the first nine months of the year

Aluminum producer Alro Slatina (ALR) reported group-wide turnover of 2.24 billion lei for the first nine months of the year, 21% below that of January-September 2022, as well as a loss of 394 million lei, over the 109.5 million lei from January-September 2022, according to the company's announcement published yesterday on the website of the Bucharest Stock Exchange (BVB).

According to the report, the value of sales follows the trend of international aluminum quotations: the average level on the London Mercantile Exchange for three-month contracts was $2,306/ton, down 19% from the average recorded in the first three quarters of last year of $2,836 dollars/ton. On the other hand, the company had higher sales volumes of extruded products, bars, slabs and strips in January-September 2023 compared to the same period in 2022. The Group's net loss increased in the first three quarters of 2023 , due to lower aluminum quotes, falling demand and higher utility costs, the report said.

Marian Năstase, Chairman of Alro's Board of Directors, said: "The challenging international business environment continued to put even greater pressure on our activity, with aluminum quotations and demand slowing down. Locally, utility costs have further impacted our budget. However, the investments we made in diversifying our product portfolio and customer base paid off, and we were able to partially offset these headwinds with higher volume sales in the third quarter of 2023. Accordingly, we will continue our plan to secure our electricity supply and invest in state-of-the-art technology aimed at reducing consumption and increasing the quality and range of products".

For the first nine months of the year, Alro's cost of goods sold was 2.37 billion lei, 4% lower than in the first three quarters of 2022, while general, administrative and selling expenses were 235 .3 million lei, 13% more than in the January-September period last year.

Under these conditions, Alro recorded an operating loss of 182.6 million lei, in the January-September period of this year, compared to a profit of 145.7 million lei, in the same period of 2022.

On the other hand, Alro recalls in its report the law 206/2023 issued in July 2023 regarding the measures applicable to final customers in the electricity and natural gas market between April 1, 2022 and March 31, 2023: "The group expects in the future an impact positive on its financial results, as a result of the implementation of this law, but it is not yet in a position to make a certain estimate of the financial result. "Discussions are ongoing with electricity providers and clarifications from the authorities to determine the application of the new law, and any material updates or further details will be presented in due course," the report said.

In the middle of this year, Vimetco PLC from Cyprus owned 54.19% of the aluminum producer from Slatina, while Pavăl Holding had 23.2% and Fondul Proprietatea 10.2%.