Slovalco 1Q99 profit $4.6 million

Slovakia's largest aluminium smelter Slovalco posted profits of $4.6 million on revenues of $61 million in the first quarter of 1999, and expects good full year results, administrative director Milan Veselý said on May 4.

In 1998, Slovalco posted an audited after-tax profit of $5.95 million on revenues of $220.29 million, according to U.S. accounting standards. "Certainly we will post better results this year than in 1998... The trends are positive," Veselý said. "Last year, we were mainly affected by financial costs related to the restructuring of our loan portfolio and to exchange rate losses," he added.

In November 1998, Slovalco received a $126 million facility arranged by the European Bank for Reconstruction and Development and Credit Lyonnais at 200 basis points above LIBOR.

Veselý said Slovalco had hedged aluminium prices, as well as prices of most other inputs. Earlier this year, Slovalco had said it was considering expanding its capacity from the current 110,000 tonnes to 144,000 tonnes, through an investment that would cost some $809 million.

Veselý said the board and management still stood behind the plan, but Slovalco was currently exploring technical details and financing options. "We are also holding talks with energy producers, since electricity will be one of the main cost items," he said. "Priorities for this year include increasing production of primary foundry alloys which command a higher premium," said Veselý. He added that Slovalco was also planning to sell the surplus pre-baked anodes it produced.

Slovalco is 80% owned by Slovak aluminium firm ZSNP. The EBRD and Norsk Hydro hold 10% each. Slovalco said it had exported some 83.5% of its production. Its main products were extrusion billets, primary foundry alloys and wire rods.

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