Vimetco released a second half year interim report for 2010

Sun, 11/21/2010 - 10:28

Amsterdam, 22 November 2010: Vimetco NV (LSE: VICO), the global producer of primary and processed aluminium products, today announces interim financial results for the nine months ended 30 September 2010.

Financial Highlights:

 

9M 2010

9M 2009

Primary aluminium production (tonnes)

657,000

454,000

Processed aluminium production (tonnes)

103,000

83,000

Primary aluminium sales (tonnes)

673,000

467,000

Processed aluminium sales (tonnes)

81,000

62,500

Revenue (USD millions)

1,661

1,048

EBITDA (USD millions)

233

204

Net profit (USD millions)

26

48

Earnings per share (USD)

0.017

0.109


Frank Müller, Chief Executive Officer, commented:
 
“The evolution of the business during the first nine months of this year proved us once again that we are correctly implementing the development strategy. We continued our focus both on upstream, by further securing the raw materials and energy sources and on downstream, by continuing to focus on improving our products quality and portfolio.”
 
Overview

During the first nine months of 2010, Vimetco continued to implement its full vertical integration strategy, along with securing its necessary raw materials and ensuring the long-term competiveness of the company. Moreover, the Company is closely monitoring the international market conditions and is fully prepared to take all necessary measures to adapt to any changes it may occur. 
In the first nine months of 2010, the aluminium market showed signs of recovery, with LME pricing increasing from a low of USD 1,900/tonne, to a high of USD 2,300/tonne. As a result of the improved aluminium demand, the Company’s output reached 657,000 tonnes, in the first nine months of this year, from 429,000 tonnes of aluminium in H1 2010. Moreover, Vimetco continued its focus on higher added value products, with the production of processed aluminium reaching 103,000 tonnes, already exceeding the 2009 full year level. 
The Company further worked at securing the supply of raw materials, Zhongfu Power through one of its subsidiaries acquiring majority stake in some coal mines.
During the first nine months of this year, the Romanian operations also consolidated their financing structure, by signing the syndicated loan with the European Bank for Reconstruction and Development, amounting to USD 180 million, that refinances most of the Romanian segment existing debt. The loan was executed in Q3 of 2010.

Financial review
 

Sales for the period were USD 1,661 million (9M 2009: USD 1,048 million). The increase was mainly determined by higher aluminium prices, increased premium and higher quantities sold as effect of bigger production capacities and increased demand on the international markets. 
 
Cost of goods sold increased to USD 1,429 million from USD 871 million during 9M 2009. This was mainly due to increased sold quantities, as well as due to higher costs with raw materials.
 
Operating profit increased to USD 142 million from USD 122 million in 9M 2009, while net profit for the period was USD 26 million (9M 2009: USD 48 million). 
 
Operational Update

Romania

The Romanian segment continued its long term strategy to focus on high value-added products. Thus, the total processed aluminium production for these nine months of 2010 increased to 44,700 tonnes, from 28,600 reported during the first nine months, last year. The total overall sales of primary aluminium reached 112,000 tonnes for the first nine months of 2010, while the sales of processed aluminium reached 44,000 tonnes. 
The stand alone net profit, as per local accounting standards, registered by Alro was of USD 41.2 million, compared to USD 28.3 million registered in the similar period of 2009. 
Alro Group registered a net profit of USD 53 million in 9M 2010, as per IFRS standards, with an EBITDA of USD 108 million, better than during the similar period of 2009 when net profit was of USD 36 million and EBIDTA of USD 96 million. Alro Group turnover reached USD 433 million, compared to USD 388 million turnover registered after the first nine months of 2009.
At the beginning of August, Alro finalised the loan restructuring process and signed the syndicated loan with the European Bank for Reconstruction and Development (“EBRD”) that refinanced most of the company’s existing debt. The Company drew down most of the USD 180 million loan during the 3rd quarter of 2010.  

China
During 9M 2010, China segment achieved sales of primary aluminium of 561,000 tonnes compared to 321,000 tonnes in 9M 2009. Sales of processed aluminium stood at 37,000 tonnes compared with 34,500 tonnes in 9M 2009. 
During the first nine months of 2010, Zhongfu Power acquired through one of its subsidiaries the majority stake in some coal mines, in order to ensure part of the coal needed for energy production.
Sales revenues for Chinese operations amounted USD 1,226 million, significantly higher than the 9M 2009 level of USD 648 million, reflecting higher quantities sold, as well as higher aluminium prices on the Chinese market.

Sierra Leone
Production of bauxite reached 814,000 tonnes in 9M 2010, compared to 514,000 tonnes in the same period of 2009. Sales of bauxite (net of moisture) were 963,000 tonnes. Out of the 963,000 tonnes of bauxite sold, 924,000 tonnes were sold to Alum, Vimetco’s alumina refinery in Romania. 

Outlook
The latest market data show the aluminium industry is offering signs of improvement. We will continue to monitor the international market in order to be able to take most appropriate measures in response to trends.

About Vimetco

Vimetco N.V. is a global, vertically integrated producer of primary and processed aluminium products with major production assets in Romania, Sierra Leone and China, and a holding company in The Netherlands. Vimetco NV controls an aluminium production capacity of 1.1 million tonnes pa. Vimetco’s shares are listed on the London Stock Exchange (LSE: VICO).