Romanian aluminum producer Alro slashes sales target for this year by 6% on lower prices

Romanian company Alro Slatina, the largest aluminum producer in Central and Eastern Europe (excluding CIS), adjusted its sales budget for this year by 6 percent, to USD 605 million, according to data posted on its website. The company previously estimated sales of USD 642 million. The main reason for the sales adjustment is the lower price of aluminum on the London Metal Exchange. Alro expects a medium sales price of USD 1,700 per ton, compared to USD 1,900 per ton at the beginning of this year. Sales volumes budgeted are almost unchanged at 145,000 metric tons of primary aluminum products and 83,500 tons of processed aluminum products which generate higher added value. Following the changes in sales estimates the company expects a total loss of abut USD 18.3 million for this year, compared to a net profit of USD 3.24 million in the initial budget that the company posted at the beginning of the year. The first budget project wasn’t approved by the company’s shareholders due to changes in market conditions. Alro’s management complained about the high energy costs the company had in recent years due to the large amounts of green energy certificates it had to pay and even said that Alro could close production because of the large losses. Following complaints from Alro, ArcelorMittal and others, the Romanian Government decided to reduce the amount of green certificates that industrial companies must buy. Last year, Alro posted a loss of USD 62.3 million while sales were USD 585 million. The adjusted budget for this year sees a sales growth of about 3.3 percent. Alro is part of Vimetco, a company registered in the Netherlands which is controlled by Russian businessman Vitaliy Machitski. Vimetco also has aluminum production facilities in China. Alro shares are listed on the Bucharest Stock Exchange. The company has a market capitalization of almost EUR 200 million (USD 275 million). Andrei Chirileasa, andrei@romania-insider.com