Dear Shareholders and Business Partner,
In a number of respects, the past year was for AL INVEST Břidličná, a.s. a turning point. At the beginning of 2005, the owner of the company, the KARBON INVEST, a.s. group, presented its new business strategy oriented to the mining industry, which resulted to its decision on reduction of investments in other areas. The decision led to the commencement of the process of sale of AL INVEST Břidličná, a.s. that was completed at the end of 2005. SI Corporate Finance, a.s. through AIB CZ, a.s., became the new owner.
SI Corporate Finance, a.s. took over the ownership of the company and defined its strategy for the next period. The strategy is based on the medium-term strategy of investments in the development directions of the company and the confirmation of the strategic orientation to the product line of rolled semi-finished products and flexible packaging materials with emphasis put on the products with high added value.
In 2005, AL INVEST Břidličná, a.s. had to face, within its production and sales activities, unprecedented pressure from the external environment. The year 2005 was the first period in which the company had to cope fully with the one-time impact of the 6 % import duty on the import of input raw material after the accession of the CzechRepublic to the EU. The results of the sales activity that is in 60 % realised in the export to the markets of the EU and Eastern Europe were, to a great extent, negatively affected by a continued increase in the exchange rate of the Czech Crown against the Euro. The costs of production were increased due to a significant increase in prices of gas and electric power. At the end of 2005, the price of the basic input raw material, primary aluminium, reached its 10-year high and imposed fierce pressure on the sales margin.
The company increased the volume of contracts year-on-year and strengthened its position in the fierce competitive environment of the dynamically developing markets of Central and Eastern Europe both in the segment of rolled semi-finished products and in the segment of flexible packaging materials. The investment strategy of increasing the production capacities was confirmed by successful sales activities. The positive trend of producing products with high added value continued. The activities in the mentioned areas had positive effects on the impact of negative effects of the external environment.
With respect to forecasts of the development of fundamental factors affecting the activities of AL INVEST Břidličná, a.s., SI Corporate Finance, a.s. decided to restructure fundamentally all the processes within the company in order to ensure the continuous development. This demanding task will be executed in 2006.
I would like to thank our shareholders, business partners, and employees of the company for their cooperation in 2005. I am convinced that the company will perform successfully all the tasks set.
Mgr. Petr Matuška
Chairman of the Board of Directors
25 May 2006