Vimetco reports full year financial results for the 12 months ended 31 December 2016

Fri, 04/28/2017

Amsterdam, 28 April 2017 – Vimetco N.V. (LSE: VICO), the global producer of primary and processed aluminium products, today announces its financial results for the 12 months ended 31 December 2016.

Financial highlights

  • Sales of USD 2.7 billion, from USD 1.8 billion in 2015
  • EBITDA of USD 314 million, compared to USD 181 million in 2015
  • Net profit of USD 8 million, from a net loss of USD 437 million in 2015
  • Total assets of USD 4.8 billion, down from USD 4.9 billion in 2015

Operational highlights

  • Total production of electrolytic aluminium increased to 918,000 tonnes, from 889,000 tonnes in 2015
  • Total production of processed products increased to 321,000 tonnes, from 137,000 tonnes in 2015

 

Vitali Machitski, Chairman of the Board, said:

“After many years of continuous efforts while facing several challenging situations, in 2016 we continued to invest in research and development to sustain our focus on high value-added products while placing innovation as a top priority in our plans to make aluminium products that are usable in the most sophisticated industries worldwide. And even though 2016 was a year marked by an unstable macroeconomic climate and quite low aluminium prices at international level, we finally had the confirmation that the measures taken in the past years were in the right direction, as our both segments reported improved results after several consecutive years of losses.

In 2016 Vimetco remained committed to its long-term strategy of becoming a fully vertically integrated aluminium producer that delivers high value-added products to its clients. This commitment, together with the measures taken during the latest years, are translated into innovative production facilities and

into the recognition of our improvement ambitions by various partners: from the commissioning of the deep processing plant stage 1 in China, which is streaming our way to new markets with its installed capacity of 600,000 tpa of hot rolled products per annum, to the successful qualification for aerospace industry followed by a partnership with one of the leading players in the industry, and further to various awards and prizes received by many of our subsidiaries.

Even though the latest years were tough for the aluminium industry players, we kept our focus on the investment and innovation side of our operations, but nevertheless we did not lose sight of the fact that a key element of our business model is being sustainable and socially responsible. In line with this, in Romania we continued to expand the scrap recycling capacity, while in China the state-of-the-art equipment in our largest investment worth more than USD 850 million, namely the deep processing plant, has a major positive impact over the environment, resulting in fewer emissions and lower energy consumption rates.

Vimetco has recently announced its proposal to seek the cancellation of listing of its Global Depositary Receipts on the official list 2016, after nine years of being a listed company on the London Stock Exchange. The cancellation is still subject to your approval at the Extraordinary General Meeting, after which it is estimated to take effect on 6 June 2017. The background of the proposition was a complex process of analyses of the current environment and of the future challenges and opportunities for the Company, with the final objective to reach the best solution for the Company and its stakeholders (including, but not limited to, its shareholders) in the current context. I, together with the entire Board team, encourage all shareholders to accompany us in the longer term vision for Vimetco by continuing to hold shares in Vimetco following cancellation of the listing. We believe that the cancellation of listing is in the best interests of all stakeholders to maximise potential strategic opportunities and near term objectives”.

 

Gheorghe Dobra, Chief Executive Officer, said: 

“We believe in this business and our everyday operations are a proof of our commitment to the aluminium industry; we strive to become better and better each day and our latest results show that we are going in the right direction. Despite the fact that 2016 was marked by a highly volatile market, which continued to be impacted by pricing pressures due to an LME below 1,600 USD/tonne during H1 2016 and around 1,700 USD/tonne at the end of the year, combined with lower conversion premiums, we managed to achieve improved consolidated results. These figures are another proof that we have succeeded in adapting our business to evolving market conditions and that our measures regarding the overall reduction of the costs and efficiency improvement were the right ones.

Also, in order to overcome the difficult situations faced during 2016, the Chinese segment diversified slightly its business, in the sense that in 2016 an important amount of trading of commodities was also performed, in addition to the normal course of the business.

Regarding the Romanian segment, 2016 was a historical year as all the intensive efforts made by the entire team during the last several years have paid-off, in the sense that profits were obtained after four years of making losses; the enhanced levels of output in terms of quantities, as well as costs reductions and increased efficiency of its processes were the main factors that led to these improved results. These significantly improved results were also directly impacted by the exemption of up to 85% from the obligation to acquire green certificates of which the Romanian segment fully benefited during 2016, while in 2015 it benefited only for the last seven months.

Another major achievement during 2016 was the fact that Airbus, a 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 this contract, Alro will supply aluminium flat rolled products for aircraft manufacturing. This partnership 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. Moreover, in 2016, we succeeded to benefit from the raw materials and utilities cost reduction which was reflected in a higher EBITDA amounting to USD 314 million as compared to only USD 181 million in 2015 and in the end in improved net result of profit amounting to USD 8 million, as compared to a loss of USD 437 million in the previous year.

Looking to the future, we are confident that in 2017 we will have the capacity to maintain ourselves competitive on a complex and highly challenging international market and we will continue our efforts in the service of innovation, having the objective to expand our clients’ portfolio and to enter new markets. We believe it is essential to remain focused on maintaining a strong and flexible balance sheet while achieving sustainable growth through consolidation of 2016 results. 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.”

 

For further information please contact: 

Ana Maria Imbrea

Investor Relations Officer

Vimetco N.V.

Phone  +40 0374 570 717

Mobile: +40 752 105 339

Email amimbrea@vimetco.ro

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 more than one million tonnes of electrolytic aluminium, 655,000 tonnes of hot rolled products, 530,000 tonnes of cold rolled products, 1.4 million tonnes of casting, 60,000 tonnes of secondary aluminium, 25,000 tonnes of extruded products, 600,000 tonnes of alumina, 1.7 million tonnes of bauxite, 2.1 million tonnes of coal, 900 Mega Watts of electricity, and 298,000 tonnes of baked anodes per annum. Vimetco’s global depositary receipts are listed on the London Stock Exchange (LSE: VICO).

www.vimetco.com