Alro profit slumps

Aluminium producer Alro Slatina, one of the best state-owned companies, has trimmed its revenue and expense budget (BVC), following unfavourable circumstances on the international market.

The new BVC estimates that net profit will be 400 billion lei (14 million dollars) lower than initial expectations and 300 billion lei (10 million dollars) lower than last year.

According to the new budget, the company’s total revenues will stand at 9,120.69 billion lei, instead of the 9,558.53 billion lei estimated in the BVC previously approved by the General Assembly of Shareholders in April.

The slump posted by Alro sales is due to the dramatic decrease of the aluminium price on the international market, from 1,550 dollars/tonne last year to 1,450 dollars/tonne now. Initial forecasts for this year were based on a price of 1,600 dollars/tonne.

“The latest forecasts point out that the price will keep on falling due to the economic slowdown at the international level. Under such circumstances, we cannot even be sure of the new net profit estimation,” Peter Braun, vice president of Alro Management Board, told Ziarul Financiar.

Alro shares, which are listed on the stock exchange, on Monday lost 11.48% following the announcement regarding budget adjustments.

On the other hand, the decrease was also triggered by the impossibility to buy Alro shares and place them within the offer launched by US company Marco International at the price of 25,000 lei/share.

The price went down to 21,600 lei/share, while most brokers estimate that the decrease will maintain as the offer concludes.

“Anyone who had a genuine interest in these shares has sold them during the offer, as they realised the stock was no longer interesting to the capital market. I really don’t know who will eye Alro from now on,” Daniel Palita, analyst with Alpha Finance, said.