Interim Financial Results for the Six Months Ended 30 June 2016

Fri, 08/26/2016

Amsterdam, 26 August 2016: Vimetco N.V. (LSE: VICO, “The Company”, “the Group”, or “Vimetco”), the global producer of primary and processed aluminium products, today announces its interim financial results for the six months ended 30 June 2016.

 

Financial and Operational Highlights

 

 

H1 2016

H1 2015

Sales

USD million

 1,245

 855

EBITDA1)

USD million

 147

 129

EBITDA margin

 

12%

15%

Net (loss)/profit

USD million

 -34

-142

 

 

 

 

Production

 

 

 

Electrolytic aluminium production

metric tonnes

      452,600

        428,600

Processed aluminium production

metric tonnes

      166,600

          54,800

Alumina production

metric tonnes

      231,200

        195,300

Bauxite production

metric tonnes

      679,100

        689,000

Coal production

metric tonnes

      330,800

        309,300

Energy production

MWh

   3,463,600

     3,281,300

 

Gheorghe Dobra, Chief Executive Officer commented:

We achieved improved results in H1 2016 despite operating in a highly volatile market, which continues to be impacted by pricing pressures due to an LME below 1,600 USD/tonne, combined with lower conversion premiums. These results demonstrate once again that we have succeeded in adapting our business to evolving market conditions and that our strategy of reducing overall costs and increasing efficiency is the right one.

The Chinese segment made a major step forward by beginning operations on its deep processing plant after the completion of the testing period; this project benefits from the latest technology and represents a key asset for the Group. As a direct consequence, the hot rolling mill capacity for the Chinese segment reached 600,000 tpa, while the cold rolling mill has a 250,000 tpa capacity, which resulted in higher sales to third parties during H1 2016. The intensified trading of aluminium and coal in China was also a factor behind the increased sales.

The Romanian segment reported positive results for H1 2016, with enhanced levels of output in terms of quantities, as well as costs reductions and increased efficiency of its processes. Another major achievement for this segment during H1 2016 was the fact that Airbus, the leading aircraft manufacturer has selected Alro, the Romanian subsidiary as a provider for aluminium. The agreement is for a multi-year period, starting 2017. Under the terms of the Contract, Alro will supply aluminium flat rolled products for aircraft manufacturing. We are looking forward to starting this partnership with Airbus and supplying best quality aluminium plates for the aerospace industry. This opportunity is yet another confirmation that the significant investments we made in upgrading our production facilities and extending our portfolio were successful. We are committed to offering our customers the best products available on the market and to meeting all their requirements and specifications in terms of quality, portfolio and supply.

Despite the fact that the Romanian segment reported a profit and the Chinese segment improved its results, the Group reported a loss of USD 34 million for H1 2016, due to the levels of overproduction in China that have added more pressure on both the LME and premiums and by the high leverage of the Chinese segment. This also makes it more difficult to enter new markets or to attract new clients.

However, we believe that this challenging environment also offers opportunities for growth and innovation. As such we continue to closely monitor the evolution of the international markets while intensifying our efforts to innovate by expanding our clients’ portfolio and entering new markets. For example, we recognise that the automotive and construction markets reported strong gains in the first half of 2016. Furthermore, the usage of aluminium cans in the beer market continues to increase given the opportunities they provide for superior graphics and innovation in can design. Moreover, we believe that there is space in the market for new packaging such as the aluminium bottle. All of these areas could represent future lines of business, so we continue to monitor the latest developments.

Within this volatile environment, we believe it is essential to remain focused maintaining a strong and flexible balance sheet while achieving sustainable growth. We will continue our investment strategy to reduce the costs of our inputs and the consumption rates, while monitoring the LME in international markets, so that we are able to adapt our business to the new market conditions.”

- Ends -

 

About Vimetco

Vimetco N.V. is a global, vertically integrated producer of primary and processed aluminium products with production assets in China, Romania and Sierra Leone, and a holding company in The Netherlands. Vimetco N.V. controls annual production capacities of up to one million tonnes of electrolytic aluminium, 340,000 tonnes of processed aluminium products, 600,000 tonnes of alumina, 1.7 million tonnes of bauxite, 2.25 million tonnes of coal, 3 x 300 MW of electricity and 318,000 tonnes of baked anodes per year. Vimetco’s global depositary receipts are listed on the London Stock Exchange (LSE: VICO).