Alumina plant's profits fall 97%

PRETAX PROFITS at the largest alumina refinery in Europe, Rusal Aughinish on the Shannon estuary, last year tumbled 97 per cent to $3.3 million (€2.6 million), new returns to the Companies Office confirm.

Ownership of the refinery passed into the control of Russian oligarch Oleg Deripaska after it was purchased by United Company Rusal from Aughinsh Alumina's previous owners, Swiss trading firm Glencore.

Accounts filed by Limerick Refinery Alumina, whose principal activity is the production and sale of alumina, show that the company's pretax profits for 2007 were $3.3 million compared to $124.6 million recorded in 2006.

The main factors behind the steep drop in pretax profits last year is the 59 per cent increase in the cost of purchasing bauxite and gas on the 2006 spend.

The figures show that there was a 39 per cent increase in "cost of sales" going from $381 million in 2006 to $581 million last year. This included bauxite purchases of $246 million from Calibre Worldwide Property and gas purchases of $146 million from Glencore Energy - nearly double the $76 million spent on gas the previous year. Bauxite stocks cost $170 million in 2006.

Accumulated profits stand at $321 million, while shareholders' funds at the end of 2007 were $375 million.

One of the biggest employers in the midwest, the figures show that the company had payroll costs for its 481 staff of $52 million last year - an increase of 8 per cent on the staff costs of $48 million in 2006.

A 150MW combined heat and power (CHP) plant was commissioned at the site two years ago to power the refinery and provide surplus energy to the national grid.

The company is recommending that no dividend be paid. In a statement, the directors said that they "are satisfied" with the performance of the company and the group for the year.

The accounts show all of the company's sales of $527 million of alumina took place in non-EU countries. They also confirm that, as part of the acquisition by United Company Rusal, an agreement was reached that the refinery's former owners, Glencore, waived a loan of $4.6 million due to Limerick Alumina Refining.

The Aughinish Alumina plant is the largest of nine alumina facilities operated by UC Rusal, and the enlarged company controls one-eighth of the aluminum produced in the world. Current annual output of alumina at Aughinish reaches 1.8 million tonnes.