Alro sees decline in earnings

Aluminium producer Alro Slatina is expected to trim the Budget of Revenues and Expenses (BVC) for this year, following negative evolution of the aluminium price on the international market.

The company’s budget, which had estimated total revenues worth 9,558.53 billion lei and net profits of 1,475.91 billion lei, had taken into account an aluminium price of 1,600 dollars per tonne.

The price has never reached this level since the beginning of the year. On the contrary, it shrank to 1,500 dollars per tonne.

“Although forecasts for the next semester are more optimistic, we are reserved and we want this to be reflected by our budget,” Marin Nitu, Alro economic manager, told Ziarul Financiar.

Peter Braun, Conef vice president, said, “if we calculate the difference between the price estimates and the real level, a gap of 17 million dollars (about 484.6 billion lei i.e.) results.”

Conef holds 13.88% in Alro, while its main shareholder, Marco International, holds another 18.11% stake. The budget of revenues and expenses has recently been a reason for dispute between Alro management and Marco International representatives in Romania.

The latter said that estimates for 2001 were not realistic and the production structure did not meet the market trends. Another reason for BVC adjustment was Emergency Ordinance 79/2001, which stipulates that the average salary must be tied with productivity.

“We are still making some calculations. We do not know to what extent the ordinance enforcement will affect the salaries,” Nitu said.

Alro’s budget pinned H1 total revenues worth 4494.24 billion lei and gross profit worth 800.51 billion lei.

The company’s Q1 results were on track, as it registered 2,384 billion lei in revenues and 441.84 billion lei in gross profit.

“I think we will meet expectations over the second half of the year as well,” Nitu said. The budget will be adjusted during a General Assembly of Shareholders (AGA), scheduled for July 6.