Wednesday 12 June 2024

Shaikh Daij and Murray

Sharp rise in alumina price hits Alba Q3 profits

MANAMA, October 28, 2018

Aluminium Bahrain (Alba) generated a net income of BD14.3 million ($38 million) in the third quarter of 2018 versus BD25.8 million ($68.5 million) for the same period in 2017, down by 44 per cent due to higher alumina prices (60 per cent year-on-year increase).  
With regards to total sales/revenues, Alba reported BD234.6 million ($623.8 million) in Q3 2018, compared to BD235.3 million in Q3 2017. Earnings per share (EPS) in the quarter were fils 10 versus fils 18 in Q3, 2017. 
Alba’s top-line and bottom-line for the third quarter and nine months of 2018 were primarily driven by higher metal sales’ volume and partially offset by higher alumina prices, the company said. 
For the nine months of 2018, Alba’s net income stood at BD77.3 million ($205.6 million), an increase of 12 per cent year on year, compared to BD69 million ($183.5 million) in nine months in 2017. Total sales/revenues reached BD699.8 million ($1,861.2 million), up by 16 per cent YoY, compared to BD605 million ($1,609.1 million). Earnings per share were fils 55 versus fils 49 for the nine months of the year 2017.
Alba’s total assets as at September 30, 2018 reached BD2.131 billion ($5.668 billion), versus BD1.686 billion ($4.484 billion) for the same period of 2017, an increase of 26 per cent YoY. Total shareholders’ equity as at September 30, 2018 was BD1.091 billion ($2.903 billion), up by 4 per cent YoY, when compared to BD1.052 billion ($2.799 billion). 
Other highlights:
• Total sales and production volume touched 248,970 metric tonnes (MT) and 251,472 MT, respectively. 
•  Alba value-added sales averaged 60% of total shipments in Q3 2018. 
• The achieved benefits of Titan – Phase III are $83/MT 
•  Line 6 Expansion Project in in progress: Line 6 Smelter achieved overall progress of  >70%; and Power Expansion Project (PS 5 & PDS) overall progress was 72% & 92%
Industry highlights during the Q3 included:
• Despite the trade-tensions, the global physical demand remain healthy with world consumption up by 4 per cent YoY. Mena demand hit double-digit growth (+10% YoY) driven by major infrastructure spending in Saudi Arabia (+25% YoY). Demand in Asia up by 5% YoY led by Chinese consumption, Europe consumption up by 3% YoY thanks to sound demand across nuilding & construction (B&C) and transport sectors, while the demand in North America rose by 2% YoY driven by auto production (heavy-duty trucks) and construction sector. 
• Global production grew at slow pace (+2% YoY); Asian supply was up by 3% YoY (Chinese supply rose by 2% YoY) while production in North America fell by 4% YoY due to the late ramp-up of New Madrid smelter.  World market is in deficit with China (-333 Kt) & (-445 Kt) without China.
• Q3 2018 cash-average was $2,056/t and LME inventories were 1.1 million metric tonnes as of September-end 2018.
• Alumina prices spiked upwards thanks to supply shortage and averaged $540 per metric tonne. 
Commenting on Alba’s financial performance for the nine months of 2018, Board chairman Shaikh Daij Bin Salman Bin Daij Al Khalifa said: “Despite higher alumina prices, Alba managed to deliver sound financial performance. As we progress with Line 6 Expansion Project, we look forward for the first hot metal by January 1, 2019 and safe start-up of Line 6." 
Alba’s chief executive officer Tim Murray added: “The unprecedented spike in alumina prices has a significant impact on the aluminium industry and Alba was no exception. Despite the negative impact of alumina prices, Alba was able to deliver solid financial results through our Project Titan Cost Improvement Program. I would also thank our employees and contractors for taking extreme ownership on Safety during the difficult summer months.”  - TradeArabia News Service

Tags: aluminium | Alba | growth |

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