Amag Austria Metall AG in Ranshofen continued on its growth track and set a new record in the first half of the year.
Total shipments amounted to 226,000 tonnes, up 10% compared with the same period a year earlier. Gerald Mayer, CEO of Amag, comments: “We benefited from additional production capacity in the first half of the year. In the Casting division, we grew shipment volumes in the double-digit percentage range mainly thanks to our new melting furnace. In the Rolling division, we successfully continued the ramp-up of the most modern aluminium rolling mill in Europe and also significantly increased shipments.”
The market environment continues to be characterized by growth in demand for primary aluminium and rolled products, although trade disputes and the increasing slowdown in the global economy exerted a negative effect on growth dynamics in terms of demand and the aluminium price. The average aluminium price (3-month LME) reduced by 16% to USD1,850 per tonne in a half-year comparison.
Revenue rose by 3% to €555m in the first half of the year. Earnings before interest, taxes, depreciation and amortisation (Ebitda) amounted to 72m (-16.5%). This reduction especially reflects the lower price level. The significant shipments increase in the Rolling division as a result of the ongoing ramp-up at the Ranshofen site had a positive effect on earnings.
Net income after taxes stood at €18.9m (-43%).
Outlook for 2019
According to current forecasts by the market research firm CRU, global demand in 2019 for primary aluminium and rolled products is expected to grow by 1 and 3 % respectively. Annual growth rates of 3 to 4 % are expected over the next five years.
“The medium-term outlook for aluminium and its alloys offers a promising basis for our growth strategy, which we will consistently pursue. With the most modern aluminium rolling mill in Europe, our technological expertise and our focus on aluminium recycling, we are ideally positioned to benefit long-term from growing demand for aluminium,” says Mayer.
Amag could stand to gain from the abolition of additional US import duties on aluminium for supplies from Canada through its interest in the Canadian Alouette smelter, unless the US premium level is adjusted to reflect this tariff effect.
The ramp-up in the Rolling business is progressing well, leading to the expectation of year-on-year growth in shipments.
Experience shows that prices for aluminium and raw materials can exhibit high volatilities over the course of the year. In connection with the general economic development, the trade conflicts and the sales development of the customers, there are also forecast uncertainties that could influence the demand and price development in the second half of 2019.
For the aforementioned reasons, Amag provides its earnings forecast in the form of a considerable bandwidth. For the 2019 business year, the management board expects Ebitda for the group in a range between 125 and 150m euros (2018: €141m).