SUCCESS - CEO Bradvica Announces: Aluminij Ends the Year Positively

On the occasion of the end of the calendar and financial year, CEO of Aluminij d.d. Mostar Ivo Bradvica addressed the reporters at the occasional annual press conference by making an announcement that the Mostar smelter would end the year positively, which was yet to be confirmed by the adoption of the final accounts at the end of February next year.

- There is a special sense of pride since this news arrives in these extremely difficult times, when the metal price is the lowest in the past 15 years, when our electricity price is rocketing 48 € / MWh, and the price of input raw materials do not cease to grow. We have been significantly helped by the fact that the first six months of 2011 we concluded with a profit of about 4.5 million KM and we implemented drastic austerity measures. I would sincerely like to commend all our employees who have been producing the purest aluminium of the highest grade quality in the world for many years now and with the highest possible capacity of this smelter, but I really must say that in 2012 I do not expect any particular progress, nor shall there be it. Moreover, next year, according to all forecasts, is going to be harder and worse than this one, and possibly it will make us to take some ungrateful measures, but this victory gives us that necessary strength to continue with the convulsive struggle, because Aluminij and the jobs of all our employees have been saved - said CEO Bradvica, and he also pointed out that he has kept the promise he made in December last year, but as to the following year, he would not dare to make such predictions.

He informed the journalists of the fact that Aluminij managed to cover the loss of 13.5 million KM from the previous year, and that all salaries were paid on time with all bonuses and contributions, all accounts were settled, the external debts were reduced to a negligible level, and even some investment projects had been initiated.

- As things stand at present, there is no company in our area, hardly even in Europe, especially in the metal industry, that will be able to operate positively in 2012. Day after day, we keep hearing  of bankruptcies, sale of assets, dismissals, closure of aluminum smelters that pay electricity at  price of 12-18 € / MWh. With our electricity price I must be realistic, so today with a heavy heart I  had to inform our aluminium buyers in BiH, that in 2012 they are going to face difficult and less favorable conditions as to the purchase of our aluminum, because we expect loss for next year and we cannot carry the burden of unfavorable market only by ourselves. The situation is like this, any increase in electricity price, even of one euro per MWh, could cause a collapse for us, and although the Government of the Federation BiH is a 90-percent owner of Elektroprivreda HZ HB (power utility company) and it also has a significant stake in the capital structure of Aluminij, we keep hearing of announcements on electricity prices increase, even though the Government insists that it recognizes the strategic importance of Aluminij, the smelter that provides 900 jobs as the state leader in exports. Therefore we are also forced to change our way of doing business with the local partners and to set prices of our products according to market price of metal and with objectively calculated costs of input raw materials, primarily electricity. All these disturbances will have to be suffered by everyone, unless the Government shows good will and understanding, because negotiations are always an option, and by that I mean the economic formulas, electricity price linking to the price of metal, etc - added Bradvica.

Anyway, in 2011 Aluminij has achieved ​​the total planned productionof 160 thousand tons, out of which about 130,000 of primary aluminum and 30,000 of solid aluminium, that is also the  plan for the year 2012. We are finalizing an important project of gasification in our casthouse, and the project documentation for the revitalization of 220 kV high-voltage substation has also been completed. The problem in regards the silo within the Port of Ploče has also been resolved, and many other strategic projects, and we have also been tirelessly working on finding a solution for stable source of energy supplying, i.e., the Aluminij power plant construction.