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Q3 2019 and Nine Months 2019 Financial Performance
Alba’s top-line and bottom-line for the Third Quarter and Nine-Months of 2019 were primarily impacted by lower LME price [US$1,761/MT vs. US$2,056/MT - a drop of 14% Year-over-Year (YoY) in Q3; US$1,804/MT vs. US$2,158/MT - a drop of 16% YoY for the Nine-Months], lower premiums - and offset by higher Sales’ volume.
The Company generated a Profit and Total Comprehensive Income of BD10.7 million (US$28.5 million) in Q3 2019 versus BD14.3 million (US$38.1 million) for the same period in 2018, down by 25% YoY. The Company posted a Gross Profit of BD29.2 million (US$77.6 million) versus BD19.0 million (US$50.6 million) in Q3 2018, up by 53% YoY. With regards to Total Sales/Revenues, Alba reported BD287.1million (US$763.6 million) in Q3 2019, up by 22% YoY, compared to BD234.5 million (US$623.8 million) in Q3 2018. Earnings per share (EPS) in this quarter were fils 8 versus fils 10 for the same period in 2018.
With regards to the Nine-Months of 2019, Alba reported a Loss and Total Comprehensive Loss of BD8.4 million (US$22.4 million), down by 111% YoY, compared to a Profit and Total Comprehensive Income of BD77.2 million (US$205.6 million) for the same period in 2018. The Company posted a Gross Profit of BD45.4 million (US$120.9 million) versus BD93.3 million (US$248.3 million) for the Nine-Months of 2018, down by 51% YoY. Total Sales/Revenues reached BD735.7 million (US$1,956.6 million), up by 5% YoY, compared to BD699.7 million (US$1,861.1 million) for the Nine-Months of 2018. Earnings/ (Loss) per share were fils (6) versus fils 55 for the same period in 2018.
Alba’s Total Assets as at 30 September 2019 stood at BD2,425.1 million (US$6,449.7 million) versus BD2,208.7 million (US$5,874.3 million) as at 31 December 2018, up by 10% YoY. Total Shareholders’ Equity as at 30 September 2019 stood at BD1,065.4 million (US$2,833.5 million), down by 1% YoY, versus BD1,073.5 million (US$2,855 million) as at December 31, 2018.
Q3 2019 Industry Highlights
Q3 2019 Alba Highlights
Aluminium demand has lost momentum in most global markets: world-market consumption almost flat, first decline since 2009, due to weak economic conditions, slow global manufacturing and increased use of scrap metal. A slowdown in the US market has led to a drop of 3% YoY in aluminium consumption, while Europe consumption was down by 1% YoY owing to lower vehicle demand. Consumption in MENA rose by 4% YoY driven by infrastructure spending in UAE and Saudi Arabia.
World production inched down by 1% YoY despite the supply-growth in North American market. Asian supply was down by 1% YoY supported by Chinese supply disruptions [a drop of 3% YoY], while production in North America continued to gain momentum post 2018 lacklustre (+7% YoY supported by smelters’ restarts).
World market in deficit with China (-467 Kt) & (-61 Kt) without China.
LME-Cash averaged US$1,761/t - down by 14% YoY and physical premium prices remain under pressure.
LME inventories below 1-million Metric Tonne (MT) [0.936 million MT in September] while Alumina Price remains relatively high - close to 17% of LME price.
2019 Alba Priorities
Plus 11 million working-hours w/o LTI on 30 September 2019 [12.5 million working-hours on October 24]
A double-digit growth for Alba Sales’ volume & Production in Q3 2019: Sales’ volume reached 376,025 MT - up by 51% YoY while Production topped 385,396 MT - up by 53% YoY
Achieved benefits of Titan – Phase IV are US$15 million
Line 6 Expansion Project almost complete:
- Line 6 Smelter [overall progress > 98%]; and
- Power Expansion Project [PS 5 & PDS overall progress: 97% & 99%]
Commenting on Alba’s Financial Performance for Q3 and Nine-Months of 2019, the Chairman of Alba’s Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa, said:
- Continued Focus on ‘Think Safety First & Always’ Initiative
- Deliver on Project Titan Phase IV [Projected Savings of US$ 40 Million by 2019-end]
- Focus on Future Upstream Opportunities
- Value Added Sales’ Product Qualification Associated with Line 6 commissioning into commercial operations
- Roll-out Alba’s New Vision, Mission and Values
- Preparation ongoing for Line 6 Inauguration on 24 November 2019
“Despite downbeat economic and market sentiments, we were able to lock-in positive profitability in Q3 thanks to the progressive ramp-up of Line 6.
We look positively into the future as we stand at the threshold of becoming the world’s largest aluminium smelter with Line 6 fully going on-stream soon.”
Alba’s Acting Chief Executive Officer, Ali Al Baqali added:
“2019, no doubt, has been a difficult year for the aluminium market due to depressed LME prices and overall industry outlook. However, we aim to finish 2019 strong by achieving for the first-time a production of 1.35 million metric tonnes and exceeding 15 million working-hours without LTI – another first in Alba’s history.”
Alba's Management will be holding a Conference Call on Tuesday 29 October 2019 to discuss Alba's financial performance for the Third Quarter & Nine-Months of 2019 as well as outline the Company's priorities for the remainder of this year.