Amag on course for growth in volatile market environment

Amag Austria Metall AG successfully continued on its organic growth track during the first half of 2018.

The market environment – which is characterized by annual demand growth for primary aluminium and aluminium rolled products – was particularly impacted by special factors. Additional import tariffs for aluminium, introduced by the US administration on 1 June, also affect deliveries from the European Union and Canada. Capacity cuts by Brazilian authorities to the world’s largest alumina refinery as well as US sanctions against Russia led to market concerns about supply shortages in aluminium and alumina. High price fluctuations were the consequence.

CEO Helmut Wieser said: “Especially in such turbulent times, it becomes clear that Amag, with its integrated site in Ranshofen and its 20% interest in the Alouette smelter in Canada, is very well positioned strategically. The ability to make recourse to the company’s own primary aluminium produced in Canada and our own casting and recycling capacities ensure a high level of supply security for our Ranshofen site.”

The Amag Group achieved shipments of 204,700 tonnes in the first half of 2018. This level, which was down 5% compared with the year-ago period, particularly reflects the planned modernization activities in the Metal and Casting divisions. Shipment volumes in the Rolling division registered further growth compared with the first half of the previous year, in line with the strategic growth programme.

Revenue in the first half of 2018 amounted to 540 million euros, slightly above the previous year’s level. Earnings (Ebitda) amounted to a total of 86 million euros, down 7%. This reduction mainly reflected higher raw materials costs and the higher start-up costs for the site expansion in Ranshofen. Amag achieved a net income after tax of 33.0 million euros (-12%).

Outlook for 2018

As in recent years, attractive market growth in aluminium and its products is anticipated for 2018. The ramp-up of the new plants and facilities will make additional production capacities available in the second half of the year. As a result, significant volume growth in the Rolling business is anticipated for 2018 and in the subsequent years.

CEO Helmut Wieser said: “The organic growth track at the Ranshofen site was successfully continued during the first half of 2018. Along with the R&D casting plant for rolling slabs and the new cladding station in the Rolling division, a new melting furnace for foundry alloy products was also commissioned. The ramp-up of the new plants and facilities from the Amag 2020 expansion project ran successfully and we achieved important qualifications for different products during the first half of the year.”

Given a market environment impacted by special factors as described above, raw material markets are currently exposed to high price fluctuations. Against this background Amag makes only a rough earnings forecast for 2018. The additional US import tariffs on aluminium will influence the 2018 earnings negatively in a mid-single-digit range in millions of euros. Taking into consideration the market conditions over the past weeks, the management board expects the Ebitda of the Amag Group for the 2018 business year to be recorded in a range between 150 and 170 million euros.