Aluar showed a solid performance with better than expected results, driven by the peso depreciation.
Consolidated net revenues grew 17,9% y-o-y in in the first nine months of FY 2018/19, thanks to an increase in foreign exchange rate, offsetting lower deliveries.
The Argentine peso devaluation had a higher positive effect on sales than the negative impact on costs, which in addition increased due to a higher alumina price and the elimination of export refunds. Operating margin grew from 13% to 19%, and added to the positive result generated in financial items derived from the application of the accounting inflation adjustment, net income amounted $5.281,9 million in the first nine months of the fiscal year, 208,0% higher y-o-y.
The international price of primary aluminum has slightly dropped in the last quarter, currently around US$1.800 per tonne, the international price of alumina (main raw material) has also decreased.
The company does not expect inconveniences in placing planned deliveries abroad. In the local market, it is expected that the recessionary conditions throughout the year will start reversing to gradually recover usual operating volumes.
The stock target price may slightly descend, driven by an increase in Argentina’s country risk.