Romania’s only aluminum producer Alro Slatina (BVB ticker: ALR) posted a RON 144 million (EUR 32 million) loss for the first quarter of 2014, compared to a small profit for the same period of last year, according to the company’s quarterly report.

The adjusted net result, which also takes into consideration non-current assets impairment and profits or losses on derivatives, was a loss of RON 51 million (EUR 11.3 million), almost double year-on-year. Alro’s turnover was down 2.2 percent, to RON 496 million (EUR 110 million).

“While our overall results continued to be impacted by external factors, beyond our control, we managed to maintain our market position and to further invest in the company’s efficiency”, said Marian Nastase, president of Alro’s board of directors.

He added: ”The high energy costs, determined mainly by the eco-taxes and the low aluminum prices on the London Metal Exchange had a significant impact on the Company’s net result. In order to offset the energy consumption taxes costs, we continued and we will continue to pursue our long-term strategy, focused on increasing the output of higher value-added products. This strategy allowed us to counteract the unfavorable and fragile aluminum market. Moreover, we are confident that it will allow us to take advantage of any opportunities that arise once the aluminum market recovers.”

During the first quarter of 2014, Alro continued to focus on supplying high value-added products, increasing its processed aluminium production to 20,100 tonnes, from 18,800 tonnes in Q1 2013. Moreover, in March 2014 the company reported a production record of 7,500 tonnes of processed aluminium products, the highest level reported until now, which represents the result of the company’s aim of increasing its operations efficiency and the production of highly processed products.

The total primary aluminium production was of 62,500 tonnes, a similar level with the one reported in Q1 2013, of 62,400 tonnes. However, the average aluminium price on the London Metal Exchange, which decreased to 1,708 USD/tonne in Q1 2014 from 2,003 USD/tonne in Q1 2013, offset the positive impact generated by the higher level of sales reported by the company during Q1 2014. Alro’s costs grew due to increased expenses with raw materials, including the overcompensation scheme of the renewable energy sector.

Alro is part of the internationla group Vimetco, which is controled by Russian businessman Vitaliy Machitski. Alro is listed on the Bucharest Stock Exchange and has a market capitalization of EUR 196 million.

Andrei Chirileasa, andrei@romania-insider.com