Manama, February 2 (BNA): Aluminum Bahrain B.S.C. (Alba) (Ticker symbol: ALBH), one of the largest aluminum smelters in the world, reported a profit of BD 39.4 million (US$ 104.9 million) for the fourth quarter of 2022, a decrease of 78% year-on-year against a profit of BD 181.2 million. (481.8 million USD) for the same period in 2021.
The company reported basic and diluted earnings per share of 28 fils for the fourth quarter of 2022 versus basic and diluted earnings per share of 128 fils for the same period in 2021. Total comprehensive income for the fourth quarter of 2022 was BD 36.6 million (US$ 97.3 million) against total comprehensive income. for the fourth quarter of 2021 of BD 183 million (US$ 486.8 million) – a decrease of 80% year-on-year. Gross profit for the fourth quarter of 2022 was BD 80.6 million (US$ 214.3 million) compared to a total profit of BD 215.5 million (US$ 573.2 million) in the fourth quarter of 2021 – a decrease of 63% year-on-year. amounting to 462.4 Bahraini dinars. BD 1 million (USD 1,229.8 million) in the fourth quarter of 2022 compared to BD 523.3 million (USD 1,391.7 million) for the same period of 2021 – a decrease of 12% year-on-year.
For the full year 2022, Alba posted a profit of BD 416.2 million (US$ 1,106.8 million), down by 8% year-on-year, compared to a profit of BD 451.9 million (US$ 1,201.8 million) for the year 2021. Profitability amounted to Diluted share of 294 fils versus basic and diluted earnings per share of 319 fils in 2021. Alba’s total comprehensive income for the full year 2022 was BD 452.7 million (US$ 1,204 million), a decrease of 1% year-on-year, compared to total income Comprehensive of BD 458.5 million (US$ 1,219.5 million) for the year 2021. For the full year 2022, the total profit was BD 545.6 million (US$ 1,451.1 million) against the gross profit of BD 577 million (US$ 1,534.7 million). ) in 2021 – down 5% year-on-year. Revenues for 2022 were BD 1,840.9 million (US$ 4,896.1 million), up 16% year-on-year, compared to BD 1,584.8 million (US$ 4,215 million) for 2021.
Total equity as of December 31, 2022 amounted to BD 1,822.5 million (US$ 4,847 million), an increase of 21% year-on-year, compared to BD 1,503 million (US$ 3,997.4 million) as on 31 December 2021. BD 2,617.2 million (US$ 6,961 million) compared to BD 2,624.6 million (US$ 6,980.3 million) as at 31 December 2021 – a decrease of 0.3%.
Alba’s Board of Directors has proposed to pay a final dividend of 117.58 fils per share (excluding treasury shares) in the amount of BD 166,306,000 million subject to the approval of the company’s shareholders at the Annual General Assembly meeting to be held on February 26, 2023.
Industry highlights in 2022
Macro Uncertainty and Disruption to the Aluminum Industry (+1% YoY)
2022 was a volatile year: the impact of the war between Russia and Ukraine, persistent fears of coronavirus in China, rising energy costs in Europe, rising interest rates, recession fears and ongoing supply chain disruptions all affected the aluminum market.
Demand in the Middle East increased by 4% yoy supported by higher consumption in the UAE (+7% yoy), Bahrain (+1% yoy) and Saudi Arabia (+1% yoy)
– North American consumption is relatively healthy (+2% yoy) supported by infrastructure spending as well as upside in the automotive and packaging sectors
– Chinese junk consumption growth (+1% yoy) due to lockdown and logistical challenges
Low energy availability, rising energy costs and inflation continue to weigh on European demand (-3% y/y)
Global Market View + 2% compared to last year
Production in China rose 4% year-on-year after supply cuts in 2021 and a delay in the increase in production
Middle East supply: a modest increase of 3% yoy supported by the UAE (+6% yoy) and Bahrain (+2% yoy)
– European smelting industry has been hit hard by higher gas/energy prices which has curtailed supply (-8% yoy)
North American production pressure due to economic slowdown (-3% yoy)
The global market deficit widens by the end of 2022 with China (420 thousand tons) and without China (480 thousand tons).
LME rates and premiums
– LME cash flow averaged $2,707 per ton in 2022 – up 9% year-on-year
– LME inventories remain low at 447,000 tons by the end of 2022 (-52% yoy) which is at a 22-year low while Chinese stocks are at a 6-year low
Alba Major ESG highlights
– Alba emphasized collective cooperation between Gulf smelters for sustainable aluminum production at the Gulf Aluminum Dinner (GAD) 2022.
– Received the “Voluntary Service Award” from INJAZ Bahrain for the second year in a row.
– As part of the decarbonisation initiative, Alba is supporting the second phase of Bahrain’s National Reforestation Campaign “Forever Green”.
Alba wins the Gulf Aluminum Council Health and Safety Award 2022.
– Alba has won two major environmental awards from the Green Organization.
– Alba launched its ESG mini-campaign ‘Back to Basics’.
-4 million safe man-hours without lost work time achieved on January 2, 2023.
The sixth edition of the Sustainability Report (with quality assurance) was released in January 2023.
-SPL processing plant exceeds its target production by 3% [31,000 tonnes vs. a target of 30,000 tonnes].
– Alba promoted 679 employees in 2022, which is the highest number ever recorded in Alba’s history.
Key operational highlights of Alba
– All-time production was 1,600,111 metric tons, up 2.5% year-on-year.
– Sales volume increased to 1,568,134 metric tons despite market challenges (+1.1% YoY).
Value-added sales averaged 66% of total shipments versus 63% in 2021. VAP sales volume exceeded 1,042,000 metric tons (+7% annually).
– Alba exceeded Hassala savings target of US$110 million by the end of 2022 (including one-time savings of US$10 million) and achieved US$115.34 million.
– Alba has succeeded in the financial closure of the Block 4 Power Plant project [US$225 million China Export and Credit Insurance Corporation (“SINOSURE”) supported-facility with a 15-year tenor including a 3-year grace period].
– Bechtel International Ltd. has appointed Bechtel to conduct the feasibility study for the Line 7 project.
Received two major awards for investor relations by the Middle East Investor Relations Association.
– Mitsubishi Power has been awarded a Long Term Service Agreement (LTSA) to enhance the reliability, efficiency and availability of the power supply.
– To accelerate its digital transformation goals, Alba has awarded certificates to 65 employees from 24 different divisions – after successfully completing several Industry 4.0 training courses
Mixed Macroeconomic Outlook: Uncertain and Inflationary Market Sentiment
Consumption of global demand will be shaped by aftershocks from rising inflation and interest rates, and supply chain disruptions coupled with the ability of governments to continue providing stimulus. This uncertain macroeconomic outlook will overshadow the aluminum market.
– Energy shortages and rising energy costs in Europe and the United States are likely to further cut output while Chinese smelters’ output will rise at a slow pace.
Global pressures in the supply chain are set to ease and freight rates will continue to decline.
Regional premiums are under pressure due to concerns about demand for the metals.
– Weak market sentiment and pressure of the US dollar on the price of the London Metal Exchange. Prices range from $2,200/ton – $2,400/ton.
2023 ALBA PRIORITIES
– Continue the safety journey by adhering to “Safety is our license to operate”.
– Integrating ESG into our business and operations as well as deliberating with various stakeholders and potential ESG initiatives to drive sustainable value across our value chain and in line with Bahrain’s goals of “Net Zero Emissions” by 2060.
– Exceeded 2022 net final production of 1,600,111 metric tons in 2023 and continued filling Hasala.
-Continue examining potential initial opportunities to secure 1/3 alumina requirements.
– Capital on the Aluminum Stewardship Initiative (ASI) and Ecovadis certifications to penetrate new markets and amplify VAP sales.
– Advance with PS5 Block 4 and Solar Farm to raise our efficiency.
Acceleration of Bechtel’s feasibility study for Line 7.
Commenting on the company’s performance for the year 2022, Alba’s Chairman of the Board of Directors, Shaikh Daij bin Salman bin Daij Al Khalifa, said:
We at Alba are pleased to report another year of strong operational growth and record financial performance despite challenging market conditions.
– Unprecedented production of 1,600,111 metric tons while value-added sales for the first time in history exceeded 1,042,000 metric tons.
For the second year in a row, EBITDA reached a record high of $1.502 billion.
Earnings hit the three-point club again by setting another precedent of $1.107 billion.
These remarkable results would not have been possible without the strategic supervision of His Royal Highness the Crown Prince and Prime Minister Prince Salman bin Hamad Al Khalifa. This performance has allowed us not only to accelerate the servicing of our loans but also to increase our dividend payments to our shareholders.”
Ali Al Baqali, CEO of Alba added:
Our resilience as a team has enabled us to deliver outstanding performance across key performance metrics as well as set new precedents and I am confident we will continue to do so in 2023.
I implore every employee and contractor’s staff to work in accordance with our goals for 2023 – safety: our operating license, baggage packing, ready to take off safely, and not limiting yourself – to finish the job strong in the face of a challenging economic backdrop. “
Alba’s management will hold a conference call on Monday 06 February 2023 at 1pm Bahrain time to discuss its financial and operational performance for the full year 2022, set the company’s priorities for 2023 as well as share insights on current market conditions and future prospects. 2023.
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