Crisis-induced Q4 losses dragged down Alro’s profit in 2008

The steel maker plans to reduce its investments by one fifth this year, to $50 mln, rely only on its own funds, continue with plans to become airspace industry supplier, and be involved in hedging operations to maintain its profit rate at zero at least. According to the Bucharest Stock Exchange (BVB), the aluminum producer’s net profit was RON 292.8 mln (€79 mln) at the end of last year’s first nine months, higher than that for the whole of 2008, which means that the company ended the fourth quarter in the red. The company indicated that its net sales fell some four percent, to RON 1.968 billion (€534 mln), mainly due to a drop in production in the second half of 2008, because of the global financial crisis and a decline in the price of metals on the London Metal Exchange (LME). The price of aluminum on LME plunged more than 50 percent, to $1,400 per ton. “We renegotiated a portion of our contracts with our suppliers to reduce production costs and we have implemented an externalization plan of non-core activities. These measures came after we reduced aluminum production by 25 percent at the beginning of the year, due to a rise in the price of electricity on the spot market,” said Baillot. “The development strategy implemented in the past few years allowed us to take the necessary measures to maintain the company’s position in difficult market conditions. (M.B.)