Alro Slatina Predicting Slimmer Bottom Line In 2019 Due To Rising Electrical Costs

Alro Slatina Predicting Slimmer Bottom Line In 2019 Due To Rising Electrical Costs

Though the firm expects a 2-percent bump in revenues this year, Romanian aluminium company Alro SA (Alro Slatina) warned last week that net profits for the year are likely to fall by 78 percent from last year’s level.

A report released by the firm on Thursday said 2019’s revenues will total US$673.7 million, with net profits coming to US$12.4 million. Alro Slatina said that the precipitous drop in profits this year will generally be the result of a steep rise in electrical prices. The Romanian government has lately implemented regulations that will cause a spike in electrical prices for industrial buyers, of which Alro Slatina is the country’s largest.

“Larger production of processed aluminum products is reflected in higher turnover,” explained the report. “Higher costs, especially electricity and natural gas prices, are reflected in the gross margin and overall result.”

This year’s bottom-line struggles are but the latest in a run of difficulties in remaining profitable. Last year saw the firm’s net profit fall off by 28 percent to US$49 million, also largely due to rising costs in obtaining electricity.

Alro was founded in 1963 and is based in Slatina, Romania. The firm, a subsidiary of Vimetco N.V., is managed by Russian investor Vitaliy Machitski and has an installed capacity of 265,000 metric tons per year, making it one of the largest producers in Central and Eastern Europe outside of Russia and Scandinavia.