24 June 2014

Another disappointing result for Tiwai Smelter’s owner

NZAS Media Release

Rio Tinto Alcan (New Zealand) Limited (RTANZ) today released its annual financial report for the year ending December 2013 posting an underlying, after tax, loss of $18 million compared to the prior year’s underlying loss of $49 million.

“While unfavourable economic conditions continue to put considerable pressure on the smelter, we are doing everything in our control to improve our on-going commercial position. In 2013 alone we managed to save $28 million through continuous improvement initiatives,” says New Zealand Aluminium Smelter’s (NZAS) Chief Executive and General Manager, Gretta Stephens.

The net underlying loss of $18 million is reached after adjustments totalling $85 million dollars are deducted from the statutory profit of $67 million. These adjustments are related to the non-cash changes in the fair value of financial instruments associated with the power contract with Meridian Energy Ltd.

As in 2012, the underlying results of the Group are a loss despite the renegotiation of NZAS’ power contract with Meridian Energy Ltd and the $30 million payment from the government in recognition of the smelters’ importance to the stability of the New Zealand electricity market. During 2013 and to date in 2014 the smelter continues to face significant challenges from a combination of low international metal prices, the strong New Zealand dollar and the high cost of delivered power.

Ms Stephens says, “We have a proud tradition of employing generations of Southlanders and contributing hundreds of millions dollars to the New Zealand economy every year and we intend to work as hard as we can so that NZAS can keep making that contribution in the future.”