Alba Discloses its Financial Results for the First Quarter of 2022
Aluminium Bahrain B.S.C. (Alba) (Ticker Code: ALBH), the world’s largest aluminium smelter w/o China, has reported a Profit of BD146.8 million (US$390.4 million) for the first quarter of 2022, up by 181% Year-over-Year (YoY), versus a Profit of BD52.2 million (US$138.8 million) for the same period in 2021. The Company reported Basic and Diluted Earnings Per Share of fils 104 versus fils 37 for the same period in 2021.
The Total Comprehensive Income for Q1 2022 stood at BD156 million (US$415 million) versus BD58.4 million (US$155.4 million) for the same period in 2021 -- up by 167% YoY. Gross Profit for Q1 2022 was BD178 million (US$473.4 million) versus BD80.5 million (US$214.1 million) for the same period in 2021 -- up by 121% YoY.
With regards to the Revenue in Q1 2022, Alba generated BD455 million (US$1,210 million) versus BD302.7 million (US$805.1 million) in Q1 2021 -- up by 50% YoY.
Total Equity as of 31 March 2022 stood at BD1,585.3 million (US$4,216.2 million), up by 5%, versus BD1,503 million (US$3,997.4 million) as of 31 December 2021. Total Assets as of 31 March 2022 were BD2,690.5 million (US$7,155.6 million) versus BD2,624.6 million (US$6,980.3 million) as of 31 December 2021 -- up by 3%.
Alba’s top-line were driven by higher LME prices (56% YoY) and partially offset by lower Sales’ volume (-0.3% YoY) while bottom-line for Q1 2022 was driven by higher top-line and partially impacted by higher Selling and Distribution Expenses.
Economics of War & World Consumption Flat (+1% YoY)
- Having started to recover from COVID-19 pandemic, the Russo-Ukrainian war raised new challenges for commodities and created mixed market sentiment. Markets for commodities, foreign exchanges, equities and debt are all adjusting to the shock of war and the uncertainty. There will be severe economic consequences for Ukraine and Russia and, potentially, the global economy
- Middle East: Demand up by 5% YoY supported by higher consumption in Bahrain (+7% YoY), UAE (+5% YoY) & KSA (+5% YoY)
- US: Consumption up by 3% YoY supported by a surge in the construction and transport sectors despite higher costs and labour shortages
- Europe: Surging energy prices and prospect of energy supply disruptions have weighed on economic activity with auto sector feeling mostly the supply-chain strain (+2% YoY)
- China: Rising COVID-19 cases and slowdown in the property sector together with global impact of Russia-Ukraine conflict have prompted the government to loosen the fiscal policy -> flat consumption
World Market Supply Down by 2%
- The war in Ukraine has flagged strong differences between China and the Rest of the World (ROW) with LME and SHFE prices moving in opposite directions
- Middle East supply up by 4% YoY (Bahrain up by 1% & UAE by 7% YoY)
- China: COVID lockdowns weighed on growth with supply down by 2% YoY
- Europe leads World ex-China output with its production down by 5% YoY as a result of higher energy prices
- World market deficit softened on slower global demand growth with China (-0.05 million MT) and w/o China (-0.4 million MT)
LME Price & Inventories
LME-Cash averaged US$3,267/t - up by 56% YoY & LME inventories remain low at ~0.6 million MT as of 31 March 2022 (down by 66% YoY).
Alba Environment, Social and Governance (ESG) Highlights
- Alba inked a MoU with Mitsubishi Heavy Industries to collaborate on opportunities to reduce Alba’s carbon footprint
- Spent Pot Lining Treatment Plant in full operational swing to produce HiCal (125 tonnes were shipped to Thailand)
- Alba won British Safety Council’s International Safety Award for calendar year of 2021
- Alba collaborates with BAPCO to implement Environment, Social and Governance (ESG) initiatives of common interest through signing a MoU
- Board Executive Committee renamed to Board Executive and ESG Committee
- Formation of CEO’s ESG Taskforce Committee to evaluate ESG-linked initiatives associated with each of the 6 priorities (Decarbonisation; Green Energy & Aluminium; Circular Economy & Secondary Aluminium; Employee Welfare; Collaboration & Partnership; and Transparency, Communications and Due Diligence)
- 25 million safe working hours without LTI achieved on 30 April 2022
Alba Major Operational Highlights
- Sales’ volume topped 354,216 metric tonnes (MT), down by 0.3% YoY while Production reached 391,050 MT, up by 2.4% YoY
- Value Added Sales averaged 65% of the total shipments versus 62% in Q1 2021 [VAP: 230,467 MT up by 5.4% YoY]
- Al Hassalah achieved savings of US$89 million (including US$10 million one-off savings from working capital) – corresponding to US$45/MT
- Natural gas price at US$4/MMBTU till 31 March 2023
- Alba teamed with EtaPRO to use Digital Industry 4.0 and AI to improve its power stations’ performance
- Alba signed a MoU with Emirates Global Aluminium to explore opportunities to creep Line 6 production and potentially deploy EGA technological expertise for the potential brownfield expansion of Potline 7
- Alba inked a MoU with Bahrain Polytechnic to develop higher educational opportunities for Bahraini nationals especially in various engineering disciplines
- Alba honoured its national employees who have completed 10, 20 and 30 years in service
2022 Alba Priorities
- Deliver on newly-launched ESG roadmap in line with Bahrain’s Objectives for ‘Net Zero Emissions’ by 2060
- Embed ESG in the Company’s operations and processes as well as deliberate with various stakeholders and partners potential ESG initiatives to further sustainable value across our value-chain
- Meet 2022 Production Target of 1,560,000 metric tonnes & deliver on AL HASSALAH savings’ target of US$100 Million by 2022-end
- Screen potential upstream opportunities to secure 1/3 Alumina requirements
- Capitalise on Aluminium Stewardship Initiative and Ecovadis Certifications to penetrate new markets & increase VAP sales to > 70%
- Accelerate the financial closure of PS5 Block 4 and progress with Solar Farm
- Progress with the pre-feasibility study for Line 7 smelter
Commenting on Alba’s financial performance for the first quarter ended 31 March 2022, the Chairman of Alba’s Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa stated:
“We are off to a strong start in 2022 as we delivered another quarter of great results with a Profit of more than US$390 million, exceeding our performance for the first half of 2021 (Profit for H1 2021: US$385 million), reflecting the underlying momentum in our business as we capitalise on strong LME prices.”
Adding further, Alba’s Chief Executive Officer, Ali Al Baqali said:
“Thanks to our agile operations, we have been able to achieve for the first-time ever in a quarter an excellent performance on many fronts amidst the logistics’ challenges.
I also take the opportunity to thank our workforce for achieving for the first time ever in our history 25 million safe working hours without LTI.”
Alba Management will hold a conference call on Monday 16 May 2022 at 3 PM Bahrain Time to discuss its financial and operational performance for Q1 2022 as well as outline the Company's priorities for 2022 as it charts its ESG journey.