By establishing an MTN program Gränges enters the Swedish bond market. The main purpose of the forthcoming issue is to refinance parts of the existing debt, to diversify the debt structure and to support Gränges long-term strategy.
This is a good opportunity for us to upgrade and use the assets we already own, and address an attractive market niche which has been mainly served through imports. We expect the investment to make a positive contribution to earnings in 2019 and beyond.
This investment builds on our foil strategy as we invest to once again serve our light gauge foil customers and their growth plans. It is great news not only for our future customers, but also for the local community in the Newport area.
Our focus is on continuing to develop Gränges as a leading niche player in the aluminium industry. Since 2014, we have delivered our financial and operational targets, which has created value for our shareholders. An important milestone was the major acquisition we made in the United States in 2016, establishing our own production facilities in the region while at the same time broadening our product portfolio.
We have seen a good start in 2018 with strong customer demand in all markets. In the US, however, we are limited by the fact that we do not have enough capacity to meet the demand of our customers. The ongoing expansion of the plant in Huntingdon is proceeding according to plan and means that we, during the second half of 2019, will be able to increase production by up to 40 ktonnes annually.
We are currently investigating the conditions for resuming production at our facility in Newport, Arkansas, to manufacture light gauge aluminium foil for different types of consumer applications. This would be an ideal opportunity for us to upgrade and use the assets we already own, and at the same time address an attractive niche market that was previously largely supplied via imports.
The electric vehicles market is expected to grow sharply over the next decade. For Gränges, there are new business opportunities in materials for brazed heat exchangers. Our strong position in the market for heat exchangers makes us an excellent partner both for our current customers and for new players entering this growth market.
India is an important, fast-growing market that will have an impact on the global automotive landscape. As the global leader, Gränges has a significant role to play in developing new advanced materials that will allow for reduced environmental impact in the future, and helping the customers to meet the new requirements.
We’re strengthening our organisation in Finspång. Jörgen Abrahamsson, who has solid experience and knowledge about our production operations, will get a permanent role as President Europe, while Fredrik Spens as Deputy President Gränges Europe will focus on strengthening and developing our business.
The primary purpose of the program is to take a first step into the Swedish debt capital market. Commercial papers are a complement to Gränges other funding, and will help optimise the capital structure as Gränges implements its strategy.
The expansion in Huntingdon marks the next step in our strategic growth plan for the North American market. Gränges has built a strong reputation in the aluminium rolling industry, and this expansion allows us to further support our customers’ growth.
The investment represents a long-term commitment to our customers, employees and shareholders as we grow in support of our strategic markets.
The Gränges facility is a vital part of the Carroll County community and I’d like to thank Gränges for committing to create new jobs in Huntingdon and bringing us closer to making TN the No. 1 location in the Southeast for high quality jobs.
The agreement with Mitsubishi Aluminum marks a start for a long-term partnership in North America. We will leverage our strengths and together capture opportunities in the market for advanced aluminium products to mainly the automotive industry, for brazed heat exchangers but also for other products.
We remain focused on growing our presence in automotive heat exchanger materials in North America. We see many synergies with Gränges, most importantly, absolute focus on research and innovation to meet the growing demands of our automotive customers. We are excited and look forward to a long-term partnership with Gränges.
Through the investment, we secure competence and the supply chain within advanced spray-forming technology, well suited for the next generation of materials for heat exchangers. We expect to see very good opportunities for continued development of our customer offering built on this technology.
In short, the year has begun well for us. Sales volumes increased 5.7% in the first quarter, driven by continued robust performance primarily in Europe and the Americas. This compares to growth of just 1% for the period in our underlying markets, according to IHS forecasts. Adjusted operating profit was SEK 155 million, which is in line with the first quarter previous year. Higher volumes and positive currency effects have offset lower conversion prices, a change in geographical mix in terms of production costs, as well as the price lag on aluminium premiums.
We have a unique position in our industry. Through innovation and expansion, we believe that we will grow faster than the market in the coming years. Indeed, our goal is to be the market leader in all geographical regions by 2020, with growth driving strong and sustainable profitability.
India will continue to be one of our most important growth markets for a foreseeable future. Light Weight Heat Exchangers that increase fuel economy and contribute to lower greenhouse gas emissions are central areas when looking forward. As a market leader, Gränges have an important role when it comes to developing new, advanced materials that allows for reduced environmental impact.
We continued to improve profits during the third quarter, despite lower sales volume compared with previous year. In Europe and North America demand continued to be good while the weaker automotive market in China resulted in a negative development in Asia as a whole. Adjusted operating profit improved by 6.2 percent to SEK 112 million, corresponding to a margin of 8.8 percent. Favourable exchange rates continued to make a positive contribution to profits while the downturn in the aluminium premium meant an unfavourable price lag between the premiums we pay and the premiums we receive.
We must become sharper. We have a growth strategy and to be able to grow the business in a global market, we must ensure that we are competitive in all areas.
Our business control will now be clearer and we can take greater advantage of our internal competencies. Through increased focus on customer-related technical development, we strengthen our customer offering, while our strategic research will be a priority area. We will be better adapted to our market and our customers.
I am pleased to present another strong quarter for Gränges. During the second quarter of 2015 adjusted operating profit rose by 21% to SEK 158 million compared to the same quarter last year. This is our best quarterly result so far. Favorable foreign exchange rates continue to affect us positively.
We have the pleasure to present another quarter with improved earnings and increased sales volume. Adjusted operating profit rose to SEK 155 million, corresponding to a margin of 10.6%, which is our best result so far in a single quarter. We continued to have support from favourable foreign exchange rates during the first months of 2015, which was partly offset by higher costs and slightly lower conversion prices.
We are proud of our good relationship as a supplier to Delphi. The fact that we get an award for this cooperation is an honour and recognition for our employees.
Gränges performed well during the fourth quarter with a sales volume in line with the previous year and improved earnings. Adjusted operating profit rose to SEK 103 million, corresponding to an adjusted operating margin of 8.4%. Continous improvements and more efficient production, in combination with favourable foreign exchange rates contributed positively and offset higher central costs as a result of that we now are listed and an impairment loss on assets in Finspång.
The global vehicle production weakened at the end of 2014. We expect this trend to continue during the first half of 2015. Somewhat improved growth figures are expected during the second half of the year.
Overall, we still feel comfortable ahead of 2015. We have a leading global position and a clear growth strategy where Asia and North America are prioritised geographical areas. Our aim is to secure and further strengthen our position with continued good profitability.
Gränges continued to enjoy stable development during the third quarter with a sales volume level with the previous year and improved earnings. Adjusted operating profit increased by 8% to SEK 106 million which corresponds to a margin of 8.8%. The weakening of the SEK had a positive impact during the quarter and compensated for increased central costs and somewhat higher costs in the production facility in Shanghai. In Sweden, we can see that efficiency improvements continued to have an effect.
Overall we feel comfortable ahead of 2015. We have a leading global position and a clear growth strategy where both Asia and North America are prioritised geographical areas. Our aim is to secure and further strengthen our position with continued good profitability.
Asia with China in the lead will continue to be one of our most important growth markets for a foreseeable future, if not the most important. Energy efficiency and green emissions are central areas when looking forward. As a market leader, we have an important role when it comes to developing heat exchangers that are more efficient regarding energy and green emissions.
We are delighted to see that the interest in Gränges has been strong. Over the last weeks, we have presented Gränges to investors both in Sweden and internationally and the response has been very positive. Together with our new shareholders we are committed to continue on our path of development and growth.
Gränges as a global market leader in a growing niche market has been well received by the investor community and has attracted long-term and stable investors. We are convinced that the new shareholder base will support Gränges in the company’s continued growth.