Alfa Acciai Group achieves net profit for third straight year in 2011

Italian holding Siderurgica Investimenti, whose operations mainly consist of those its subsidiary Brescia-based steelmaker Alfa Acciai Group, has presented its consolidated financial results for 2011, posting revenues of €1.47 billion, up 17.8 percent year on year. Meanwhile, its net profit went down by 39.3 percent to €3.626 million. EBIT and EBITDA remained almost stable compared to 2010 values, respectively down 4.4 percent to €11 million and down 0.7 percent to €37 million.
 
Despite the increase in profitability, the Italian vertically-integrated long steel producer stated it is "among the few Italian enterprises operating in the construction sector which reported a net profit in 2009, 2010 and 2011. The producer stated that it had achieved its 2011 results despite operating at a 60 percent production capacity utilization rate.
 
In its press release, Siderurgica Investimenti highlights the sharp decrease in Italian construction activity and consequently in rebar demand. Some good business opportunities have been found in the Middle East and North Africa (MENA) region, and particularly in Algeria as EU producers benefitted from duty-free sales. Ettore Lonati, chairman of Siderurgica Investimenti, stated, "Algeria represents for Alfa Acciai a mere offset of the demand fall in Italy. Anyway, the domestic market always guarantees broader profit margins." For this reason "the group decided to adopt a careful strategy, trying to avoid addiction to exports because in North African markets the social and political situation is uncertain and also because European steel suppliers have a competitive handicap compared to non-EU competitors."
 
As a proof of the abovementioned strategy, in 2011 Italian sales revenue by Siderurgica Investimeni grew by 20 percent compared to 2010 reaching €815.5 million, while the share of its sales revenue from exports decreased from 45.73 percent in 2010 to 44.5 percent in 2011.