REG - Aluminium Bahrain - 1st Quarter Results

Aluminium Bahrain BSCAnnouncement

12/05/2022 13:45

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RNS Number : 3147L  Aluminium Bahrain B.S.C.  12 May 2022

Media Release - Thursday 12 May 2022

 

Alba Discloses its Financial Results for the First Quarter of 2022

http://www.rns-pdf.londonstockexchange.com/rns/3147L_1-2022-5-12.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3147L_1-2022-5-12.pdf)

Q1 2022 Financial Performance

Aluminium Bahrain B.S.C. (Alba) (Ticker Code: ALBH), the world's largest
aluminium smelter w/o China, has reported a Profit of BD146.8 million
(US$390.4 million) for the first quarter of 2022, up by 181% Year-over-Year
(YoY), versus a Profit of BD52.2 million (US$138.8 million) for the same
period in 2021. The Company reported Basic and Diluted Earnings Per Share of
fils 104 versus fils 37 for the same period in 2021.

The Total Comprehensive Income for Q1 2022 stood at BD156 million (US$415
million) versus BD58.4 million (US$155.4 million) for the same period in 2021
-- up by 167% YoY. Gross Profit for Q1 2022 was BD178 million (US$473.4
million) versus BD80.5 million (US$214.1 million) for the same period in 2021
-- up by 121% YoY.

With regards to the Revenue in Q1 2022, Alba generated BD455 million (US$1,210
million) versus BD302.7 million (US$805.1 million) in Q1 2021 -- up by 50%
YoY.

Total Equity as of 31 March 2022 stood at BD1,585.3 million (US$4,216.2
million), up by 5%, versus BD1,503 million (US$3,997.4 million) as of 31
December 2021. Total Assets as of 31 March 2022 were BD2,690.5 million
(US$7,155.6 million) versus BD2,624.6 million (US$6,980.3 million) as of 31
December 2021 -- up by 3%.

Alba's top-line were driven by higher LME prices (56% YoY) and partially
offset by lower Sales' volume                (-0.3% YoY) while
bottom-line for Q1 2022 was driven by higher top-line and partially impacted
by higher Selling and Distribution Expenses.

 

Industry Highlights

Economics of War & World Consumption Flat (+1% YoY)

·    Having started to recover from COVID-19 pandemic, the Russo-Ukrainian
war raised new challenges for commodities and created mixed market sentiment.
Markets for commodities, foreign exchanges, equities and debt are all
adjusting to the shock of war and the uncertainty. There will be severe
economic consequences for Ukraine and Russia and, potentially, the global
economy

·    Middle East: Demand up by 5% YoY supported by higher consumption in
Bahrain (+7% YoY), UAE (+5% YoY) & KSA (+5% YoY)

·    US: Consumption up by 3% YoY supported by a surge in the construction
and transport sectors despite higher costs and labour shortages

·    Europe: Surging energy prices and prospect of energy supply
disruptions have weighed on economic activity with auto sector feeling mostly
the supply-chain strain (+2% YoY)

·    China: Rising COVID-19 cases and slowdown in the property sector
together with global impact of Russia-Ukraine conflict have prompted the
government to loosen the fiscal policy -> flat consumption

 

World Market Supply Down by 2%

·    The war in Ukraine has flagged strong differences between China and
the Rest of the World (ROW) with LME and SHFE prices moving in opposite
directions

·    Middle East supply up by 4% YoY (Bahrain up by 1% & UAE by 7%
YoY)

·    China: COVID lockdowns weighed on growth with supply down by 2% YoY

·    Europe leads World ex-China output with its production down by 5% YoY
as a result of higher energy prices

·    World market deficit softened on slower global demand growth with
China (-0.05 million MT) and w/o China (-0.4 million MT)

 

LME Price & Inventories

LME-Cash averaged US$3,267/t - up by 56% YoY & LME inventories remain low
at ~0.6 million MT as of 31 March 2022 (down by 66% YoY).

 

Alba Environment, Social and Governance (ESG) Highlights

§ Alba inked a MoU with Mitsubishi Heavy Industries to collaborate on
opportunities to reduce Alba's carbon footprint

§ Spent Pot Lining Treatment Plant in full operational swing to produce HiCal
(125 tonnes were shipped to Thailand)

§ Alba won British Safety Council's International Safety Award for calendar
year of 2021

§ Alba collaborates with BAPCO to implement Environment, Social and
Governance (ESG) initiatives of common interest through signing a MoU

§ Board Executive Committee renamed to Board Executive and ESG Committee

§ Formation of CEO's ESG Taskforce Committee to evaluate ESG-linked
initiatives associated with each of the 6 priorities (Decarbonisation; Green
Energy & Aluminium; Circular Economy & Secondary Aluminium; Employee
Welfare; Collaboration & Partnership; and Transparency, Communications and
Due Diligence)

§ 25 million safe working hours without LTI achieved on 30 April 2022

 

Alba Major Operational Highlights

§ Sales' volume topped 354,216 metric tonnes (MT), down by 0.3% YoY while
Production reached 391,050 MT, up by 2.4% YoY

§ Value Added Sales averaged 65% of the total shipments versus 62% in Q1 2021
[VAP: 230,467 MT up by 5.4% YoY]

§ Al Hassalah achieved savings of US$89 million (including US$10 million
one-off savings from working capital) - corresponding to US$45/MT

§ Natural gas price at US$4/MMBTU till 31 March 2023

§ Alba teamed with EtaPRO to use Digital Industry 4.0 and AI to improve its
power stations' performance

§ Alba signed a MoU with Emirates Global Aluminium to explore opportunities
to creep Line 6 production and potentially deploy EGA technological expertise
for the potential brownfield expansion of Potline 7

§ Alba inked a MoU with Bahrain Polytechnic to develop higher educational
opportunities for Bahraini nationals especially in various engineering
disciplines

§ Alba honoured its national employees who have completed 10, 20 and 30 years
in service

 

 

 

2022 Alba Priorities

§ Deliver on newly-launched ESG roadmap in line with Bahrain's Objectives for
'Net Zero Emissions' by 2060

§ Embed ESG in the Company's operations and processes as well as deliberate
with various stakeholders and partners potential ESG initiatives to further
sustainable value across our value-chain

§ Meet 2022 Production Target of 1,560,000 metric tonnes & deliver on AL
HASSALAH savings' target of US$100 Million by 2022-end

§ Screen potential upstream opportunities to secure 1/3 Alumina requirements

§ Capitalise on Aluminium Stewardship Initiative and Ecovadis Certifications
to penetrate new markets & increase VAP sales to > 70%

§ Accelerate the financial closure of PS5 Block 4 and progress with Solar
Farm

§ Progress with the pre-feasibility study for Line 7 smelter

Commenting on Alba's financial performance for the first quarter ended 31
March 2022, the Chairman of Alba's Board of Directors, Shaikh Daij Bin Salman
Bin Daij Al Khalifa stated:

"We are off to a strong start in 2022 as we delivered another quarter of great
results with a Profit of more than US$390 million, exceeding our performance
for the first half of 2021 (Profit for H1 2021: US$385 million), reflecting
the underlying momentum in our business as we capitalise on strong LME
prices."

Adding further, Alba's Chief Executive Officer, Ali Al Baqali said:

"Thanks to our agile operations, we have been able to achieve for the
first-time ever in a quarter an excellent performance on many fronts amidst
the logistics' challenges.

I also take the opportunity to thank our workforce for achieving for the first
time ever in our history 25 million safe working hours without LTI."

Alba Management will hold a conference call on Monday 16 May 2022 at 3 PM
Bahrain Time to discuss its

financial and operational performance for Q1 2022 as well as outline the
Company's priorities for 2022 as it charts its ESG journey.

 

ENDS

 

 

About Aluminium Bahrain B.S.C. (Alba)

[Ticker: ALBH]

 

Starting as a 120,000 tonnes per annum smelter in 1971, Alba, today, is the
world's largest aluminium smelter ex-China with a production of more than
1.561 million metric tonnes per annum (2021). Its diverse product portfolio of
Standard and Value-Added Products (VAP)s are exported to more than 240 global
customers through its sales offices in Europe (Zurich), Asia (Hong Kong &
Singapore) and subsidiary office in the U.S. Alba is dual listed on Bahrain
Bourse and London Stock Exchange and its shareholders are Bahrain Mumtalakat
Holding Company B.S.C. © (69.38%), SABIC Industrial Investments Company
(SIIC) (20.62%) and General Public (10%).

 Over the last five decades, Alba has been a major contributor to the social,
industrial, and economic development of the Kingdom of Bahrain. The Company is
at the heart of a thriving Bahrain's aluminium sector, which accounts for
approximately 12% of the country's GDP. Renowned for being an employer of
choice, Alba is a model in Employee Training and Development and employs over
3,100 people across its operations (2021), of which 84% are Bahraini
nationals. It is noteworthy that in 2021, Alba achieved more than 581,000
training- hours despite the challenges of COVID-19.

Alba is recognised as one of the top industrial companies in the world with
high standards in Environment practices, Social contribution and Corporate
Governance. Over 50 years, the Company has invested into projects that had a
positive impact on the society in which it operates. More recently, Alba's
US$37.5 million zero-waste Spent Pot Lining Treatment Plant, the upcoming
5-plus MW Solar Farm Project and strategic role in the future Aluminium
Downstream Park are a testimony of Alba's Sustainability Roadmap that will
meet the goals of Bahrain's Economic Vision 2030 as well as the Net Zero
Carbon targets led by HRH the Crown Prince and Prime Minister of Bahrain in
COP26 summit. In addition, globally-recognised certifications such as ISO
9001, ISO 14001, ISO 27001, ISO 45001, IATF 16949:2016 and ASI Performance
Standard Certification and Ecovadis attest to Alba's actions to produce
aluminium responsibly and sustainably.

Safety of its employees and contractors' workforce remains Alba's
top priority. Over the years, the Company has maintained an excellent track
record in Safety and Health for which it has won prestigious international
awards such as the RoSPA Gold Award  (9 years in a row) and International
Safety Award with Merit from British Safety Council in 2020. Alba stayed
strong on its journey of Safety Excellence by topping more than 25 million
safe working-hours without any Lost Time Injury (LTI) by 30 April 2022.

.

Alba has also been recognised internationally for its strong values and
operating excellence, with the most recent ones being top ESG performer in
Bahrain by ESG Invest; Safeguard Label from Bureau Veritas; and Best Corporate
Governance Award by Ethical Boardroom. For more information on Alba, please
visit www.albasmelter.com (http://www.albasmelter.com)

Alba External Grievance Mechanism

 

Alba's External Grievance Mechanism receives and facilitates the resolution of
any affected communities' concerns and grievances about Alba's Environment and
Social (E&S) performance. External grievances about Alba's E&S
performance can be logged via the Alba Integrity Line
(https://www.albasmelter.com/About%20Alba/Code-of-Conduct/Pages/default.aspx)
- an independently operated confidential reporting hotline in multiple
languages - via a toll-free phone system or via the intranet 24 hours a day.

Alba Response to COVID-19 Pandemic

 

Alba's response strategy to COVID-19 was initiated back to January 2020 in
line with the guidelines of Bahrain National Taskforce for Combating
Coronavirus (COVID-19). The Company was able to maintain safe operations
throughout 2021 thanks to its nimble workforce - employees and contractors'
personnel.

For further details, please contact:

Eline Hilal

Director, Investor Relations, Insurance & Corporate Secretary

Investor Relations Department

Tel:         (973) 1783 5100

E-mail:   eline.hilal@alba.com.bh (mailto:eline.hilal@alba.com.bh)

Website: www.albasmelter.com (http://www.albasmelter.com)

 

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Scan the above to access Alba Website

 

 

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