Aluminum smelter Slovalco, based in central Slovakia's Žiar nad Hronom, reported a net loss of 48.1 million Sk ($1.28 million) in 1998. Compared with last year, the company reduced its net losses by 22 million Sk.
The company earned a gross profit of 69.25 million Sk in 1998, while it was 16.3 million Sk one year earlier. Slovalco general director Štefan Tesák said that gross sales totaled 7.83 billion Sk in 1998 and 8.08 billion Sk in 1997.
Tesák recently indicated that Slovalco managed to achieve these results thanks to long-term and systematic hedging of its sale prices. The price of aluminum fell unexpectedly during 1998 from $1,650 to $1,250 per tonne. Slovalco's gross sales, after taking the hedging into account, totaled 8.11 billion Sk. The company exported goods worth 6.6 billion Sk, while its imports equaled 3.78 billion Sk.
Slovalco was founded in 1993 with a registered capital of 4.95 billion Sk as a 100% owned subsidiary of aluminum giant ZSNP in Žiar nad Hronom. In October 1994, the Norwegian Hydro Aluminium company and the European Bank for Reconstruction and Development (EBRD) bought into Slovalco.
Slovalco's share assets are $150 million. In 1994, the EBRD provided the company with a $110 million loan for modernization of its production. Construction was concluded in May 1995 and operations started in December of that year.
ZSNP now controls an 80% stake in Slovalco, followed by Hydro Aluminium and the EBRD, each holding a 10% stake.