Debt of 213.8 Million KM: Mostar's Aluminij Facing Bankruptcy!

At the request of Aluminij d.d. Mostar, the company KPMG Tax & Advisory B-H d.o.o. prepared an independent business review and a framework concept for the restructuring of this state-owned company, writes the Patria news agency.  

According to information obtained by Patria, Aluminij operated with a negative gross margin in 2013 and 2014, meaning its sales were not even enough to cover production costs, leading to a total loss of 124 million KM!

Towards the end of 2014, an attempt was made to reduce the loss, but it was insufficient to remedy the consequences of the accumulated losses.

The fact that Aluminij's competitors in the market are operating profitably indicates that this company's operations are extremely inefficient. The production cost per ton of aluminum is estimated to be significantly higher than that of the competition.

As of December 31, Aluminij's total loss amounted to 213.8 million marks, which includes 120.8 million KM owed to Elektroprivreda HZHB and 67.3 million to credit institutions, while in 2015, 111 million KM is due for debt repayment.  

Furthermore, it was assessed that with its current business model and budget for 2015, the company Aluminij is over-indebted and unable to finance the 111 million KM in credit obligations.

Who Prepared the Report

KPMG Tax & Advisory B-H d.o.o., with offices in Sarajevo and Banja Luka, is one of the leading companies providing professional tax and business advisory services.

It is a member of the international network of independent firms associated with KPMG International Cooperative („KPMG International“).