Alba reports $65m Q1 profit
INDUSTRIAL NEWS
Aluminium Bahrain (Alba), one of the world’s largest aluminium smelters, has reported a profit of BD24.5 million ($65 million) for the first quarter of 2024, a drop of 48% year-over year (YoY) compared to BD47.5 million ($126.2 million) for the same period in 2023.
The company reported basic and diluted earnings per share of fils 17 for Q1 2024 versus fils 34 for the same period in 2023.
Total comprehensive income for Q1 2024 stood at BD27.7 million ($73.6 million) versus BD37.1 million ($98.7 million) for the same period in 2023 – a drop of 25% YoY. Gross Profit for Q1 2024 was BD57.3 million ($152.3 million) versus BD79.9 million (US$212.4 million) for the same period in 2023 - down by 28% YoY.
With regards to the revenue from contracts with customers in Q1 2024, Alba generated BD334.6 million ($889.8 million) versus BD369.9 million ($983.8 million) in Q1 2023 – a drop of 10% YoY.
Total Equity as of March 31, 2024 stood at BD1,794.9 million ($4,773.6 million), up by 0.3%, versus BD1,789.2 million ($4,758.6 million), as of 31 December 2023. Alba’s total assets as of March 31, 2024 were BD2,575.5 million ($6,849.6 million) versus BD2,553.6 million ($6,791.4 million) as of December 31, 2023 – up by 0.9%.
Alba’s top-line and bottom-line were driven by lower LME prices (down by 8% YoY in Q1 2024) and lower premiums (down by 27% YoY in Q1 2024).
Alba’s Operational Highlights
ļ§ Sales volume topped 363,283 MT, up by 1% YoY, while production rose to 405,893 MT, reflecting a 2% YoY growth.
ļ§ Value Added Sales (VAP) averaged 70% of total shipments, corresponding to +10% YoY [VAP: 252,772 MT in Q1'24 versus 230,491 MT in Q1'23].
ļ§ Alba secured a strategic 10-Year Gas Supply Deal with Bapco Energies, featuring a fixed price structure for the initial five years at a competitive US$4 per million British thermal units (MMBTU).
ļ§ Alba and EGA signed a comprehensive Technology Service Agreement for Reduction Line 6 which includes technical support services, monitoring services as well as operational consultation.
ļ§ Achieved savings for e-Al Hassalah at $29 million against 2024 Target of $60 million.
Aluminium Market Outlook
o Macroeconomic Headwinds: Concerns over persistent inflation and the effectiveness of government support measures continue to cast a shadow on the aluminium market. Strong dollar may limit LME price increases.
o Demand, A Delicate Balance: Despite initial restocking activities, consumer confidence in near-term interest rate cuts is waning. This could lead to a renewed drop in demand, potentially offsetting the recent improvement. The automotive sector remains the primary driver, although overall demand is expected to remain modest in Q2 2024.
o Geopolitical Tensions and Freight Rate Fluctuations: While disruptions persist in the Red Sea, freight rate stabilization has shifted the focus back to demand. Geopolitical tensions remain a significant unknown factor that could influence market dynamics.
o LME Price Forecast: LME prices are expected to range between US$2,250/t and US$2,350/t in the near term.
Alba: Safe, Sustainable, Successful
ļ§ Leading the Way: Safety First, Sustainability Always
o Aligned with Bahrain's objective of net-zero emissions by 2060, Alba embeds sustainability principles in all operations, minimizing environmental impact from raw material sourcing to product delivery.
ļ§ Operational Excellence and Growth
o Exceed 2023 Net Finished Production of 1,620,665 MT and achieve e-Al Hassalah 2024 Target of $60 million (versus 2026 Target of $150 million).
o Maintain active pursuit to source upstream resources to meet one-third of its alumina needs.
ļ§ Capacity Expansion and Efficiency Enhancement
o Leverage its industry-leading certifications such as Aluminium Stewardship Initiative (ASI) and Ecovadis to penetrate new markets and drive growth in Value Added Sales (VAP).
o Complete Block 4 Project by Q4 2024 and Solar Farm by Q2 2024.
o Review Feasibility Study Class III for ‘New Replacement Line’ (previously Line 7).
Alba Board of Directors Chairman Khalid Al Rumaihi stated: “Despite market headwinds and lower LME prices, our commitment to operational excellence yielded good results in Q1 2024. In fact, if commodity prices (LME and premium prices) had remained at Q1 2023 levels, we are confident we would have delivered an even stronger performance for this quarter.
“Such performance positions us as a frontrunner to capitalise on the upswing in LME prices driven by global aluminium demand boom. Furthermore, our focus to strategic priorities equips us to navigate 2024 with agility, capitalizing on emerging opportunities.”
Alba’s Chief Executive Officer, Ali Al Baqali, added: “While the overall economic climate remains challenging, we are laser-focused on the controllable aspects of our business: Safety, streamlined operations, and a rigorously cost-effective structure. This focus, coupled with the dedication of our entire team, empowers us to thrive even in these challenging economic conditions.” – TradeArabia News Service
