Aluminium Bahrain B.S.C. (Alba), a leading aluminium smelter, has announced a significant decrease in its financial results for both the third quarter and the first nine months of 2023. For the third quarter, the company reported a profit of BD17.3 million (US$46 million), a 64% decline from the BD48 million (US$127.6 million) profit in the same period of 2022. Basic and Diluted Earnings per Share fell to 12 fils in Q3 2023 from 34 fils in 2022. The Total Comprehensive Income for the quarter was BD20.7 million (US$55.2 million), down 64% from BD58.2 million (US$154.8 million) in the previous year. Gross Profit for the quarter stood at BD48.6 million (US$129.3 million), a 38% decrease from BD79 million (US$210.2 million) in 2022. Revenue from contracts with customers slightly declined by 0.8% YoY to BD400 million (US$1,063.8 million).
The nine-month period in 2023 saw a more pronounced decrease, with profits falling 75% to BD94.6 million (US$251.7 million) from BD376.7 million (US$1,001.9 million) in 2022. The Total Comprehensive Income for this period also dropped 75.8% to BD100.5 million (US$267.3 million) from BD416.1 million (US$1,106.6 million). Gross Profit for the nine months was down 57.8% to BD196.4 million (US$522.3 million), and Revenue from contracts with customers decreased by 16% to BD1,157 million (US$3,077 million).
As of September 30, 2023, Alba’s Total Equity was BD1,773 million (US$4,715.7 million), a 2.7% decrease from BD1,822.5 million (US$4,847 million) at the end of 2022. Total Assets, however, showed a slight increase of 0.6%, standing at BD2,633.6 million (US$7,004.1 million).
The company attributed these financial results to lower London Metal Exchange (LME) prices and reduced premiums. LME prices saw an 8% drop in Q3 2023 and a 20% decrease over the nine months.
In the global market, demand for aluminium grew by 3% YoY, with notable increases in the Middle East and China, but declines in North America and Europe. Similarly, the world supply also increased by 3%, led by production boosts in China and North America.
Alba highlighted several key environmental, social, and governance achievements, including being the first smelter in the region to be recertified to the Aluminium Stewardship Initiative’s Performance Standard and winning the Al Bilad Award for CSR 2023 in the Environment Category.
Operational highlights for Alba included a 1% increase in production to 409,445 metric tonnes in Q3 and a 2% increase to 1,213,325 metric tonnes over nine months. Sales volume also increased, and the company launched a new alloy ‘6060.HE’ in its product portfolio.
Looking ahead, the aluminium industry faces continued volatility and uncertainty. The medium-term outlook is shaped by the ongoing impact of the pandemic and the Russia-Ukraine war, with regional premia expected to drop due to weak demand.
Alba’s Board of Directors has approved the 2024 Marketing Plan and Annual Operating Plan, and reviewed strategic developments including the proposed Line 7 Project and the Power Station 5 (PS5) Block 4 Project.
Chairman of Alba’s Board of Directors, Mr. Khalid Al Rumaihi, commented on the company’s resilience and adaptability in a challenging economic environment.
“It’s a privilege to serve as the Chairman of Alba’s Board of Directors (following my recent appointment on 09 October) as we forge ahead with my fellow directors at the Board to create value for our shareholders.”
“Our financial performance demonstrate our ability to adapt and thrive in a challenging economic backdrop and I am confident in our ability to sustain this momentum as we step into 2024.”
Alba’s CEO, Ali Al Baqali, also expressed satisfaction with the company’s operational and financial performance amid market challenges.
“I am pleased to report that we have exceeded our expectations in our operational and financial performance amidst bearish market sentiment that has been clouding the aluminium industry for more than a year. Such performance was possible thanks to our ability to effectively manage costs and optimize our operations – allowing us to partially mitigate the impact of market fluctuations.”
A conference call to discuss Alba’s financial and operational performance for Q3 and the first nine months of 2023 was scheduled for November 9, 2023.