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Q2 2018 and H1 2018 Financial Performance
Alba’s top-line and bottom-line for the second quarter and first-half of 2018 were primarily driven by higher sales volume, higher LME prices (an increase of 18% Year-over-Year (YoY)) and the impact of Line 5 recovery in Q2 2017.
The Company generated a Net Income of BD 29.1 million (US$ 77.4 million) in the second quarter of 2018 versus BD 17.7 million (US$ 46.9 million) for the same period in 2017, up by 65% YoY. With regards to Total Sales/Revenues, Alba reported BD 244.0 million (US$ 648.9 million) in Q2 2018, up by 36% YoY, compared to BD 179.3 million (US$ 476.9 million) in Q2 2017. Earnings per share (EPS) in this quarter were fils 21 versus fils 12 in Q2 2017.
With regards to the first half of 2018, Alba’s Net Income stood at BD 63.0 million (US$ 167.5 million), an increase of 46% YoY, compared to BD 43.3 million (US$ 115.0 million) in H1 2017. Total Sales/Revenues reached BD 465.2 million (US$ 1,237.4 million), up by 26% YoY, compared to BD 369.7 million (US$ 983.3 million). Earnings per share were fils 44 versus fils 31 in H1 2017.
Q2 2018 Industry Highlights:
- Continued news of trade wars are unnerving the market; however, global physical demand remains healthy with world consumption up by 5% Year-over-Year (YoY). Consumption in MENA surge by +9% YoY driven by major infrastructure spending in Saudi Arabia (+20% YoY). Demand in Asia up by 6% YoY supported by Chinese consumption (+6% YoY) on the back of real-estate developments. Europe consumption up by 3% YoY due to strong demand across building, construction and transport sectors. North America demand up by 3% YoY driven by auto production (heavy-duty trucks).
- Global production down by ~ 0.5% YoY. Asian supply almost flat & Chinese supply down by 2% YoY due to delays in smelters’ ramp-up. Production in North America dropped by 5% YoY due to outages in Warrick and Sebree smelters. World market in deficit with China (-1,425 Kt) & (-959 Kt) without China.
- Q2 2018 cash-average was $2,259/t with LME ranging between $1,967/t on April 6 and $2,602/t on April 19.
- LME inventories at 1.1 million metric tonnes in June 2018.
Q2 2018 Alba Highlights:
- Launch of Summer Safety Campaign ‘Safety-Selfie’
- Production up by 23% YoY (252,081 mt) while Sales volume up by 19% YoY (249,595 mt); Alba Value-Added Sales averaged 60% of total shipments in Q2 2018
- Impact of higher Alumina prices
- The achieved benefits of Titan – Phase III are US$ 81/MT
- Line 6 Expansion Project in progress:
- Closed first part of 2ndtranche ECA-covered facilities (EUR 204.5 million)
- Line 6 Smelter [overall progress > 61%]
- Power Expansion Project [PS 5 & PDS overall progress: 63% & 91%]
Q2 2018 Alba Priorities:
- Continued focus on Safety initiatives
- Deliver on Project Titan -Phase III [2018: 1 Million MT & US$ 60/t]
- Leverage strong demand on Value-Added Sales
- Focus on future upstream opportunities
- Prepare for the start-up of Line 6:
- Close final part of 2ndECA-covered facility tranche
- Award remaining packages within 2nd half of 2018
Commenting on Alba’s sound financial performance in H1 2018, the Chairman of Alba’s Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa:
“Alba delivered a strong performance in the first half of 2018. As we are half-way through the year, we remain fully committed to achieve our targets on the Line 6 Expansion Project.”
Alba’s Chief Executive Officer, Tim Murray added:
“Safety continues to be our #1 priority as we move into the difficult summer months.
As we are facing many headwinds in the market in particular the impact of higher Alumina prices, we will be focused on our Project Titan Program as well as increase our production to offset the market challenges in the 2nd half of this year.
I also thank our people for working together on the same tune to make things happen.”
Alba's Management will be holding a conference call on Wednesday July 25, 2018 to discuss Alba's financial performance for the Second Quarter & First Half of 2018 as well as outline the Company's priorities for the remainder of the year.