Manama, August 11 (BNA): Aluminum Bahrain B.S.C. (Alba) (index: ALBH), the world’s largest aluminum smelter excluding China, reported a profit of BD181.9 million (US$483.9 million) for the second quarter. In 2022, up 97% YoY, compared to a profit of BD92.6 million (US$246.2 million) for the same period in 2021. The company announced basic and diluted earnings per share of 128 fils for the second quarter 2022 against basic and diluted earnings per share of 65 fils in Q2 2021. Total Comprehensive Income for Q2 2022 amounted to BD 201.9 million (US$ 536.9 million) versus Total Comprehensive Income for Q2 2021 of BD 90.7 million (US $241.1 million) – An increase of 123% year over year. Gross profit for the second quarter of 2022 was BD208 million (US$553.2 million) compared to BD123.7 million (US$328.9 million) for the same period in 2021 – an increase of 68% year-over-year. In terms of revenue in the second quarter of 2022, Alba generated BD520.4 million (US$1,384 million) versus BD370 million (US$984 million) in the second quarter of 2021 – an increase of 41% year over year.
For the first half of 2022, Alba reported a profit of BD328.7 million (US$874.3 million), an increase of 127% year-over-year versus a profit of BD144.8 million (US$385.1 million) for the same period in 2021. for basic and diluted earnings per share of 232 fils for the first half of 2022 compared to basic and diluted earnings per share of 102 fils for the same period in 2021. The total comprehensive income of Alba for the first half of 2022 was BD 357.9 million (US$ 951.8 million), An increase of 357.9 million Bahraini dinars (951.8 million US dollars). 140% YoY, compared to total comprehensive income of BD 149.1 million (US$ 396.5 million) in the first half of 2021. Gross profit for the first half of 2022 was BD 386 million (US$ 1,026.7 million) compared to 204.2 million BD (543.0 million USD) in the first half of 2021 – 89% year-over-year increase. In the first half of 2022, Alba generated revenues of BD975.3 million (US$2.593.9 million) compared to BD672.7 million (US$1.789 million) in the first half of 2021 – an increase of 45% YoY.
Total equity as at 30 June 2022 was BD 1,770.6 million (US$ 4,709.1 million), an increase of 18%, compared to BD 1,503 million (US$ 3,997.4 million) as on December 31, 2021. Alba’s total assets as at 30 June 2022 were BD2, 717.3 million (US$7,226.9 million) compared to BD2,624.6 million (US$6,980.3 million) as at December 31, 2021 – an increase of 3.5%.
Alba’s top streak was driven by higher LME prices (up 20% YoY in Q2 2022 and 37% YoY in H1 2022) despite steady growth in sales volume while net profit in the second and first half of 2022 driven by the upswing. High cost and partly affected by higher cost and distribution expenses.
In addition, Alba’s Board of Directors has recommended the distribution of a provisional dividend of BD45,120,000 (US$120 million), equivalent to 31.88 fils per share (US$0.08478 per share), to the shareholders whose names are registered on the Company’s Register in the Register. . Date.
Industry highlights
Economic uncertainty affects the global aluminum industry (-2% YoY)
§ Weak economic activity, high inflation rates and high interest rates affect all manufacturing industries, and this has negatively affected consumer demand as buyers are forced to reduce non-essential materials.
§ US: Aluminum demand remains resilient (+7% y/y) supported by rising construction and transportation sectors
§ Middle East: 3% y/y demand boosted by higher consumption in the UAE (+5% y/y) and Bahrain (+4% y/y)
§ China: Demand was affected by strict epidemic lockdowns and logistics issues (-6% YoY). Many sectors such as construction, packaging and consumer durables suffered the most
§ Europe: Increase in cost of living affected consumer spending with increased risk of recession (- 4% YoY)
Global market supply increased by 3% year on year
§ Macroeconomic factors continue to put pressure on the markets, which leads to a lack of clarity in the direction and trends of commodity prices
§ China: a net exporter with production at record levels (up 4% YoY) since April, but demand has not followed the same path due to the impact of the shutdowns.
§ Europe leads global production outside of China, with its production down 5% year-on-year as a result of higher energy prices
Middle East: Supply jumped 5% YoY led by higher production in the UAE (+11% YoY)
§ Global market: surplus with China (+40 karats) and without China (+64 karats)
LME price and stocks
§ LME cash averaged $2,882 per ton in Q2 2022 – a 20% increase year-over-year [lowest: US$2,397/t on 30 Jun’22 and highest: US$3,483/t on 1 Apr’22]
§ LME inventories hit a record low of 0.4 million (down 76% YoY)
Alba ESG Highlights (first half of 2022)
§ Alba wins the Royal Accident Prevention Society (RoSPA) Gold Medal Award for the ninth year in a row
§ Alba becomes the first company in Bahrain to refinance its existing syndication of US$1.247 billion linked to sustainability objectives
§ Alba was awarded Best Company in Bahrain in the ESG list by ESG Invest – the investment research arm of the “Sustainability Excellence”
§ Alba will host a delegation from the Bahrain Association of Banks to promote its objectives in the field of environmental, social and corporate governance on June 12, 2022
§ Alba launched its comprehensive ESG campaign “A Journey, Not a Destination” on June 20, 2022
§ 29 million safe working hours without lost working time achieved on August 09, 2022
Alba’s Operational Highlights (H1 2022)
Sales volume exceeded 742,658 metric tons (almost constant) while production was 787,592 metric tons, an increase of 1.7% year-on-year.
§ Value-added sales averaged 67% of total shipments vs. 64% (+70% VAP sales in Q2 2022)
§ Alba opened its sales office in Singapore to enhance its presence in the Asian continent
§ Alba signed an agreement with Mitsubishi Power & SEPCOIII as EPC contractor for Block 4 at Power Plant 5
§ Alba has secured a 10-year purchase agreement with South32 for the supply of alumina
§ Al-Hasala achieved savings of $90.35 million (including a one-time saving of $10 million of working capital)
2022 Alba’s Priorities
§ Presenting the newly launched ESG roadmap in line with Bahrain’s targets for “net zero emissions” by 2060
§ Embedding ESG in operations and operations as well as trading with various stakeholders and partners potential ESG initiatives to enhance sustainable value across our value chain
§ Exceeding the 2022 production target of 1,560,000 metric tons and achieving the Hassala savings target of US$100 million by the end of 2022
§ Continue to examine potential exploration and production opportunities to secure 1/3 alumina requirements
§ Take advantage of the aluminum stewardship initiative and Ecovadis certifications to penetrate new markets and increase VAP by more than 70% of sales
§ Complete the PS5 Block 4 financial close and award the Solar Farm project by Q4 2022
§ Progress in the preliminary feasibility study for the Line 7 smelter
Commenting on Alba’s financial performance for the second quarter and first half of 2022, the Chairman of Alba’s Board of Directors, Sheikh Daij bin Salman bin Daij Al Khalifa said:
We have achieved unparalleled financial performance as we set new standards in the past three quarters (Q4 2021, Q1 and Q2 2022) and on several fronts:
Profits of BD328.7 million (US$874.3 million) in the first half of 2022 – an increase of 127% year-over-year.
Value-added sales exceeded 70% in the second quarter of 2022 – the first time in our history (67% in the first half of 2022)
Safety: A new leap has been achieved with more than 29 million safe working hours without Lost Time Injury
This strong performance has enabled us to pay an interim dividend of $120 million to our shareholders. As we move into the remainder of 2022, we remain committed to building sustainable returns while delivering additional value to our shareholders.
Ali Al Baqali, CEO of Alba, said:
“Our showroom profitability was supported by our improved product mix towards sales of value-added products and good cost savings. Despite the logistical challenges in the market, we were able to deliver another strong quarter by taking advantage of higher LME prices, which allowed us to service our loans and reduce the size of our total debt.
We are only as good as our employees. Thanks to our collective safety proactiveness, we have reached a record high with over 29 million safe working hours without lost work time.”
Alba management will hold a conference call on Monday 15 August 2022 at 2 pm Bahrain time to discuss
Operational, environmental, social and financial performance for the second quarter and first half of 2022 in addition to identifying the company’s priorities for 2022.
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