Alro Q1 2019 Report

In Q1, the company recorded an increase in sales of 2.24%, a decrease in EBITDA of 28.7% and a net loss of RON 9m.

The newest addition to the BET index, Alro published their Q1 2019 report. According to it, the company recorded sales of RON 767.4m, representing an increase of 2.4%. The sales increased despite a slight downturn of aluminium quotations in international markets. Of the total sales, revenues from processed aluminium segment accounted for 50.8%, amounting to RON  390m (+6%). Further, revenues from primary aluminium segment, which represents the second largest source of revenues (40.2%), amounted to RON 308.6m, representing a decrease of 3.7%.

Sales (Q1 2019 vs Q1 2018) (RON m)

Alro’s cost of goods sold was of RON 662.3m, representing an increase of 14%. The increase could be mainly attributed to the growth of the purchase prices of some utilities and raw materials, in line with their specific market prices. In order to reduce the Group’s energy dependence in the primary aluminium sector, Alro began to invest in improving the performance of the electrolysis sector by implementing a new pot replacement methodology. It was done by using a new design that is expected to generate a reduction in energy consumption.

In Q1, Alro reduced their G&A expenses by 4% and also diminished the level of the outstanding provision for the remuneration of staff and management for 2018 by reversing an amount of RON 14.9m from it, which is reflected in the category other operating income in 2019 (RON 20.7m).

Going further down the P&L, EBITDA amounted to RON 94.7m, representing a decrease of 28.7%, as a result of higher operating expenses.

The interest expenses increased by RON 8.7m due to the new facilities contracted by the Group in Q2 2018 and Q1 2019, and the increase of interest rates (i.e. ROBOR and LIBOR) on financial markets.

The foreign exchange loss of RON -31m is mainly due to the revaluation of the USD-denominated borrowings and other liabilities as of 31 March 2019, in the context of the significant depreciation of the RON versus the USD.

As a result of all of the above, the company recorded a net loss of RON -9m, compared to RON 124.6m in Q1 2018.

EBITDA & Net Income (Q1 2019 vs Q1 2018) (RON m)

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