Tuesday 20 March 2018

Aughinish goes into the red as revenues fall 24pc

Aughinish Alumina refinery on the Shannon estuary which recorded pre-tax losses of $40.5m last year.
Aughinish Alumina refinery on the Shannon estuary which recorded pre-tax losses of $40.5m last year.

Gordon Deegan

The largest alumina refinery in Europe on the Shannon estuary, Aughinish Alumina, last year went back into the red with pre-tax losses of $40.5m (€34m).

Limerick Alumina Refining recorded the loss as revenues slumped by 24pc from $688.39m (€581m) to $520m (€439m) due to a drop in the price of alumina worldwide.

The pre-tax loss of $40.58m followed a pre-tax profit of $14.4m (€12.1m) in 2015.

The directors stated that "the outlook in 2017 is much more positive due to higher sales prices and continuing lower production costs, which are forecasted to lead to a return to profitability."

The directors stated that the impact from the lower alumina prices were somewhat offset by lower production costs in 2016.

The loss last year included a full impairment charge of $15.8m (€13.3m) concerning the company's investment in North United Aluminium (Shenzhen).

The directors stated that the company is expected to generate positive cash flows for the foreseeable future.

The report added: "The parent continued to invest significant capital in the company to ensure its long-term sustainability and the directors have received a written confirmation of support from the company's parent."

The company's cost of sales last year reduced from $653.35m (€551m) to $536m (€452m).

Around 450 people are employed on site and staff costs at the facility last year increased marginally from $49.28m (€41m) to $50.35m (€42m). The loss takes account of non-cash depreciation costs of $33m (€27.8m) and net interest payments of $6.4m (€5.4m).

The company has incurred interest payments on a $400m facility from Swiss commodities trading and mining group Glencore since 2014 and the loan had been fully repaid by the end of last December.

Limerick Alumina Refining is owned by Russian firm Rusal, controlled by Russian oligarch Oleg Deripaska, and it purchased Aughinish Alumina from Glencore in 2007.

Irish Independent

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