Eightfold increase in profit Alchemia earned PLN 118.4 million in 2011

The revenues of Alchemia Capital Group rose last year to PLN 1 155 million and were almost two times higher than in 2010. The generated net profit reached PLN 118.4 million or over 700% more than last year (PLN 14.7 million).

- We noted the highest turnover in the history of the company and one of the best results in terms of operational and net profit. The consistently pursued strategy of building a strong pipe group is bearing its first fruits. Investors and shareholders should have a reason for satisfaction – says Karina Wściubiak–Hankó, President of Alchemia.

In the 4th quarter the company earner PLN 55.5 million with revenues at PLN 108.5 million. This is a continuation of the improvement in performance observed since the beginning of 2011. However, the last three months of 2011 were the first quarter of the Group’s operations following the completion of a series of takeovers and a broad restructuring. Operating expenses in 2011 were three-and-a-half-times lower than in the corresponding period in the previous year.

- The year 2011 was a time of unprecedented changes in the Group; something that we have worked at for many years became reality – we have built a consolidated steel group in Poland. We started centralizing our sales division, cut costs, restructured our assets. We have achieved the expected synergies – adds Wściubiak-Hankó.

Q4 in Alchemia Capital Group

PIPE SEGMENT
The last three months of 2011 were a good period for Alchemia’s pipe group (Huta Batory - steelworks, Rurexpol – steelworks and Walcownia Rur Andrzej – rolling mill). Alchemia noted the highest turnover with German (almost PLN40 mn) and Italaian (over PLN 20 m) contractors. Turnover with the American market increased rapidly as Alchemia Capital Group placed 7 million worth of pipes in the US.
In the 4th quarter the biggest demand was observed for line and 1st degree boiler pipes. The interest in pipes in the segments of drill and boiler pipes in the highest degree of processing grew significanlty. This allows the company to look with optimism not only on 2012, but also on the following years in terms of orders in the area of energy and shale gas exploration.
In the fourth quarter of 2011, after several years of efforts Walcownia Rur Andrzej fulfilled the requirements necessary to produce pipes according to the API 5L standard, successfully passed the audit and is currently waiting for the certificate. The taken measures should result in the future appreciation of WRA’s position on the energy pipe market.
Alchemia is expecting a jump in the number of orders from the energy sector, to which the full range of high-alloy boiler, drilling and line tubes manufactured by Huta Batora, Rurexpol and WRA is dedicated, with a perspective to 2020.

HUTA BANKOWA
In the fourth quarter of 2011 sales results of Huta Bankowa reached PLN 14 million, more than doubling the business plan guidelines. This result was achieved despite the fact that in the last three months of 2011 the demand for round bars was decreasing steadily. The level of orders for this product remained stable in Huta Bankowa.
As in the pipe segment, a large role was played by newly-acquired contracts. In Q4 Huta Bankowa acquired large orders for supplies of round bars the Scandinavian construction sector (Sweden and Norway). In the field of rim supplies, both railway and tram, in addition to supplying most countries in the Eastern market (Ukraine, Kazakhstan, Tajikistan, Uzbekistan, Georgia, China), holding a stable position on European market (Germany, Hungary, Romania, Holland, Belgium), Huta Bankowa acquired also new contracts from distant, new markets like Ghana.
In Q4 2011 Huta Bankowa carried out important technological investments. A calibre lathe for processing metallurgical rollers was purchased for the Rolling Mill Department and the rim defectoscopy analysis unit was modernised in the Forged-Rolled Rings Department.

KUŹNIA BATORY
In Q4 2011 the key enabler for improvement of Kuźnia Batory’s results were higher sales prices due to increased batch prices and weakening of the zloty.
In the fourth quarter Kuźnia Batory noted a significant growth in demand for forgings after electro-slag remelting for the defence industry. They were, next to round bars, the most often purchased products of Kuźnia Batory in Q4 2011. This trend is likely to continue throughout 2012.
The forge still does not use its full potential (approximately 1000 tonnes per month). This is associated with the increased demand for shaped forgings, whose production cycle is extended.