Aluminium Bahrain (Alba), the world’s largest aluminium smelter outside of China, has reported a loss of BD11.6 million ($31 million) for the third quarter of 2020, compared to a profit of BD10.7 million ($28.4 million) for the same period in 2019.
Alba’s top-line was driven in the third quarter of 2020 by higher metal sales volume thanks to Line 6 and partially offset by lower LME price (down by 3% year-over-year ($1,706/t in Q3 2020 versus $1,761/t in Q3 2019)] while the bottom line was impacted by higher depreciation, financial charges and foreign exchange losses.
The company reported basic and diluted loss per share for the third quarter of 2020 of fils 8 versus basic and diluted earnings per share of fils 8 for the same period in 2019. The total comprehensive loss for Q3 2020 stood at BD11.7 million ($31.1 million) versus total comprehensive profit for the third quarter of 2019 of BD10.7 million ($28.4 million) – up by 209% YoY. Gross profit for the third quarter of 2020 was BD25.7 million ($68.3 million) versus BD29.2 million ($77.6 million) in Q3 2019– down by 12% YoY.
With regards to the nine-months of 2020, Alba has reported a loss of BD22.3 million ($59.2 million), up by 164% YoY, versus a loss of BD8.4 million ($22.4 million) for the same period in 2019. For the nine-months of 2020, Alba reported basic and diluted loss per share of fils 16 versus basic and diluted loss per share of fils 6 for the same period in 2019.
Alba’s total comprehensive loss for nine months of 2020 was BD31.5 million ($83.8 million), up by 273% YoY, compared to a total comprehensive loss of BD8.4 million ($22.4 million) for the nine months of 2019. Gross profit for the nine months of 2020 was BD80.9 million ($215.1 million) versus BD45.4 million ($120.9 million) in the first nine months of 2019 – up by 78% YoY.
With regards to the revenue from contracts with customers in the third quarter of 2020, Alba generated BD262.7 million ($698.6 million) versus BD287.1 million ($763.6 million) in Q3 2019 - down by 8.5% YoY. For the nine months of 2020, total revenue from contracts with customers reached BD782.6 million ($2,081.5 million), up by 6% YoY, compared to BD735.7 million ($1,956.7 million) for the same period in 2019.
Total equity as at September 30, 2020 stood at BD1,046.2 million ($2,782.4 million), down by 3%, versus BD1,078.6 million ($2,868.6 million) as at 31 December 2019. Alba’s total assets as at 30 September 2020 stood at BD2,382.3 million ($6,335.9 million) versus BD2,420.2 million ($6,436.8 million) as at 31 December 2019 - down by 1.6%.
Q3 2020 Industry Highlights
* The global recovery lost its momentum as markets reacted differently with the easing of lockdown restrictions. The political and economic response to Covid-19 has also raised importance on ESG issues and given voice for stimulus packages to be green.
- World consumption was down by 4% year-over-year.
- Covid-19 outbreak continues to take its toll on aluminium demand in major markets -- world ex-China has seen a decline in aluminium consumption [a drop of 12% YoY].
- Challenges relating to pandemic, impact of failure in Brexit negotiations, US elections and US-China trade war continue to weigh on business sentiment in Europe -> leading to a contraction in aluminium demand of 13% YoY.
- Recovery in aluminium demand gathers pace in China with 3% YoY increase thanks to the government’s stimulus packages [rebound in construction and auto sectors].
* Global production witnessed a modest growth of 2% YoY. Primary Aluminium production in MENA down by 3% YoY [owing to supply cuts in UAE of c.6% YoY]. Manufacturing activity in US continues with supply in North America up by 4% YoY. China’s output grew by 5% YoY - boosted by start-up of new projects. This has led the world market to be in surplus with China (+611Kt) and (+851Kt) without China.
* LME inventories at ~1.45 million MT as of September-end (up by 56% YoY). LME-cash averaged $1,706/t (down by 3% YoY) and the physical premium prices were on roller coaster ride.
Commenting on Alba’s financial performance, Board of Directors Chairman Shaikh Daij Bin Salman Bin Daij Al Khalifa stated: “We are all in this together and Covid-19 showed us that nothing is more important than our safety. At Alba, safety of our people and contractors’ employees, is and will remain our number one priority.
“Like all businesses, our performance has been relatively dampened due to Covid-19 impacts and despite our operational resilience.”
Alba Chief Executive Officer Ali Al Baqali said: “We continue to navigate through these unprecedented times by focusing on what we control best: safety of our people, efficient operations and lean cost structure.
“We also remain optimistic that with the agility of our people and strategic capabilities, we will get back on track and stronger than before.” – TradeArabia News Service