Directors of huge Limerick employer issue caution over firm's viability

THE DIRECTORS and auditors of one of Limerick's biggest employers have issued a stark warning over the viability of the business.

Aughinish Alumina employs 482 people, with the company itself stating in planning documents that it is responsible for a further 385 downstream jobs.

Its Europe's biggest bauxite producer.

But Russian president Vladimir Putin's continued war on Ukraine has prompted those at the top of the firm to warn of "material uncertainty" over its future viability.

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It has accumulated big losses with Mr Putin’s invasion of Ukraine destabilising global energy markets and bringing about western sanctions against Russian businesses.

Accounts from the firm just filed state: "The directors are satisfied that the financial statements are prepared on a going concern basis. However, the events described above [the Ukraine war] represent a material uncertainty which may cast significant doubt over the company’s ability to continue as a going concern.”

In its audit report, EY added “war in Ukraine and possible future escalation of sanctions may impact the ability of the parent company to continue to finance the ongoing activities of the company”.

Russian oligarch Oleg Deripaska, who is known to have close ties to Mr Putin, is a key shareholder in the Limerick plant.

Earlier this year, Aughinish was separated from its parent firm, but directors have stated there is no "conclusive outcome" to date on this.

According to the up-to-date figures, Aughinish incurred a net loss of €363.18m in the year before the invasion because of the rising price of gas.

Gas prices surged after the invasion, which has damaged Aughinish further, with fears raised earlier this year about the company's continued operation at the Shannon Estuary.

Given the jobs the firm has in the region, government is keen for the plant to continue operating, and earlier this year, Minister of State Colm Brophy confirmed European Union sanctions imposed on Mr Deripaska would not impact operations at Aughinish.

The directors of Limerick Alumina Refining, owner of the Aughinish plant, declared their “reasonable expectation” of trading for another 12 months.

Although no sanctions blocked financial support from Rusal, the directors said that “cannot be guaranteed into the future” and added that Rusal was “significantly impacted” by the war.