The slowdown in the world economy and in particular the recession that has hit the EU in 2008 has affected Alcomet’s performance with sales declining 11% YoY. Some of the decrease in sales could be attributed to the decline in the price of aluminum which dropped approximately 30% last year but the company’s sales in terms of volumes declined as well by 6.6% YoY from 46k tons to 43k tons (local sales declined 5.8%, exports declined 6.8%). The company’s operating margin stayed constant at 7% but the 13% increase in interest expense (caused by the 7% increase in debt to BGN 80m and an increase in interest rates in Bulgaria) coupled with the abovementioned drop in sales has led to a 78% dive in net income to BGN 0.8m implying a profit margin of 0.4%. What is even more worrisome is the size of the impact that the contraction of the EU economy in the second half of last year had on Alcomet’s performance in the last three months of 2008. Sales in Q4 dropped 17% to BGN 46m while EBITDA margin decrease from 5% to 1% causing net income to drop to negative BGN 2.6m.