REG - Aluminium Bahrain - 3rd Quarter Results
RNS Number : 8130QAluminium Bahrain B.S.C.31 October 2021
Media Release - 31 October 2021
Alba Reports its Financial Results for the Third Quarter and 9 Months of 2021
Q3 & 9 Months 2021 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 BD125.9 million (US$335 million) for the third quarter of 2021, up by 1,184% Year-over-Year (YoY), versus a Loss of BD11.6 million (US$30.9 million) for the same period in 2020. The Company reported Basic and Diluted Earnings per Share of fils 89 for Q3 2021 versus Basic and Diluted Loss per Share of fils 8 for the same period in 2020. The Total Comprehensive Income for Q3 2021 stood at BD126.4 million (US$336.1 million) versus Total Comprehensive Loss for the third quarter of 2020 of BD11.7 million (US$31.1 million) - up by 1,181% YoY. Gross Profit for Q3 2021 was BD157.4 million (US$418.5 million) versus BD25.7 million (US$68.3 million) for the same period in 2020 - up by 513% YoY. With regards to the Revenue in Q3 2021, Alba generated BD388.9 million (US$1,034.2 million) versus BD262.7 million (US$698.6 million) in Q3 2020 - up by 48% YoY.
With regards to the nine months of 2021, Alba has reported a Profit of BD270.7 million (US$720 million), up by 1,320% YoY, versus a Loss of BD22.2 million (US$59.1 million) for the same period in 2020. The Company reported Basic and Diluted Earnings per Share of fils 191 for the nine months of 2021versus Basic and Diluted Loss per Share of fils 16 for the same period in 2020. Alba's Total Comprehensive Income for the nine months of 2021 was BD275.5 million (US$732.7 million), up by 974% YoY, compared to a Total Comprehensive Loss of BD31.5 million (US$83.8 million) in the same period of 2020. Gross Profit for the nine months of 2021 was BD361.5 million (US$961.5 million) versus BD80.9 million (US$215.1 million) in the same period of 2020 - up by 347% YoY. Alba generated in the nine months of 2021 Revenue of BD1,061.5 million (US$2,823.2 million) versus BD782.6 million (US$2,081.5 million) in the same period of 2020 - up by 36% YoY.
Total Equity as of 30 September 2021 stood at BD1,356.1 million (US$3,606.6 million), up by 26%, versus BD1,079.5 million (US$2,871.1 million) as of 31 December 2020. Alba's Total Assets as of 30 September 2021 were BD2,555.5 million (US$6,796.6 million) versus BD2,353.7 million (US$6,259.8 million) as at 31 December 2020 - up by 9%.
Alba's top-line were driven in by higher LME prices (55% YoY in Q3 2021 and 46% YoY in 9 months of 2021) and partially offset by lower Sales' volume (a drop of 7% YoY in Q3 2021 and 5% YoY in 9 months of 2021) while the bottom-line for Q3 and 9 months of 2021 was driven by higher top-line and partially impacted by higher Selling and Distribution Expenses.
Industry Highlights in Q3 2021
Strong Market Demand Supported by V-Shape Economic Recovery (+7% YoY)
§ Market sentiment has been driven by China supply disruptions, a very strong demand, and a tight physical market - all of which had led LME price to hit 10-year high > US$2,700/MT.
§ Double-digit increase in World ex-China consumption (+16% YoY), Europe's (+16% YoY), and North America's (+13% YoY) - owing to strong rebound in market recovery and economic activity.
§ Middle East demand continued to be strong (+18% YoY) supported by higher demand in Bahrain & UAE.
§ Chinese consumption almost flat (+1% YoY) due to slow growth in auto and construction market.
Global Production up by 4% YoY despite being at the Mercy of China's Power Constraints
§ Power restrictions in China trigger substantial cutbacks in throughput (+3% YoY). In total, 3.1 Mtpa capacity were cut, 1.1 million MT greenfield projects were delayed, and 3.9 million MT expansions were pushed back [power cuts impacting Chinese smelters - Yunnan, Guangxi & Mongolia].
§ Aluminium supply in GCC up by 3% YoY due to the 78Kt expansion at Al Taweela smelter while North America supply down by 2% YoY owing to supply cuts at Kitimat smelter in Canada.
§ World market swings into deficit with China (-492Kt) and w/o China (-251Kt).
§ LME inventories at ~1,230 Kt as of 30 September 2021 (down by 16% YoY).
§ Aluminium: immune from macro headwinds that affected other base-metals. LME-Cash averaged US$2,647/t - up by 55% YoY.
Alba Major ESG Highlights in Q3 2021
§ Proud recipients of SafeGuard Hygiene Excellence and Safety Label from Bureau Veritas (BV), and Bronze Medal from Brandon Hall Group Excellence in Learning Awards (Alba's "Al Jisr" Programme -- the first initiative of its kind to boost Bahranisation).
§ Recipient of Volunteer Service Award from InJaz Bahrain for contributing 482 volunteer-hours - the highest amongst Bahraini companies.
§ Awarded 41 employees who volunteered to participate in InJaz Bahrain.
§ 99.7% vaccination rate in c. 3,200 workforce.
§ 17 million safe working-hours w/o LTI was achieved on 9 October 2021.
§ Safety measures at Alba's campus continue with random rapid tests carried out daily at the Company's gates to Alba employees and contractors' personnel. All guests are to present their COVID-19 vaccine certificates to enter Alba.
Alba Major Operational Highlights in Q3 2021
§ Sales' volume at 366,151 metric tonnes (MT), down by 7% YoY, owing to logistics' challenges while Production reached 392,959 MT, up by 2% YoY, thanks to operational efficiencies.
§ Value Added Sales averaged 58% of the total shipments [VAP in MT up by 13% YoY].
§ Inaugurated the New Jetty Extension & Additional Raw Materials Storage Facilities at the Marine Terminal.
§ Soon to release of Alba's Fifth Edition of Sustainability Report (w/ quality assurance).
§ First smelter in GCC to publish its ESG Disclosure (climate change reporting) on Carbon Disclosure Project (CDP) - UK.
§ Environmental Conservation Project: construction of Spent Pot Lining (SPL) Treatment Plant is completed.
2021 Alba Priorities
§ Be the ESG Change We Want to See in the World.
§ Evolve Towards Safety Excellence & Keep Alba's Human Capital Safe Amidst COVID-19.
§ Support the Government's Initiatives & aim is to have 100% vaccinated workforce.
§ Meet 2021 Production Target of 1,540,000 metric tonnes & deliver on AL HASSALAH Savings' Target of US$70 Million by 2021-end.
§ Screen Potential Upstream Opportunities to Secure 1/3 Alumina Requirements & Continue Dialogue with Hangzhou Jinjiang Group Co. Ltd.
§ Capitalise on Aluminium Stewardship Initiative and Ecovadis Certifications to Penetrate New Markets & Increase VAP Sales.
§ Commission Spent Pot Lining Treatment (SPL) Plant.
§ Focus on Green and Sustainable Initiatives [of which Solar Farm].
Commenting on Alba's stellar financial performance for the 9 months of 2021, the Chairman of Alba's Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa stated:
"Thanks to new-all-time high LME prices in recent months coupled with Alba's production efficiencies and economies of scale, we continued to set benchmarks and reach new all-time records in our performance:
- Our Profit for the third quarter of 2021 has beaten the Profit for the second quarter by US$88.7 million while our Profit for nine months jumped by 1,320% to US$720 million.
- EBITDA margin, for the first time in Alba's history, tops 42.6% in Q3 2021 and 36.5% for the nine months of 2021.
- Our production has been on a winning streak since the beginning of 2021: 381,933 metric tonnes (MT) in Q1, 391,954 MT in Q2 and 392,959 MT in Q3.
I take the opportunity to thank the Management team as well as Alba's labor and employees for going above and beyond to score another strong set of results despite the logistics' challenges we are facing and look forward to close 2021 stronger with new precedents on all fronts - financial and operational."
Alba's Chief Executive Officer, Ali Al Baqali, added:
"Alba today joins the US$700 million club for the first time in its history with its Profits topping US$720 million for the nine months of 2021. We have reached this all-time record in our profits thanks to the resilience we have gained from Line 6 Expansion Project.
As we accelerate our transformation with a new sense of ESG urgency, we at Alba are open to new possibilities ahead to achieve a sustainable growth. I am also pleased to report that since the beginning of October, we didn't have any COVID-19 infection in our c. 3,200 workforce and no employee was quarantined till-date."
Alba Management will hold a conference call on Monday 01 November 2021 at 3 PM Bahrain Time to discuss its financial and operational performance for Q3 and 9 months of 2021, outline the Company's priorities for 2021 as well as provide an update on the current market conditions and outlook for 2021-2022.
Shaikh Daij bin Salman bin Daij Al Khalifa, Alba's Chairman of the Board of Directors
Ali Al Baqali, Alba's Chief Executive Officer
About Aluminium Bahrain B.S.C. (Alba)
Alba is the world's largest aluminium smelter ex-China with a production of more than 1.548 million metric tonnes per annum (mtpa) (2020). With a dual listing on Bahrain Bourse and London Stock Exchange, the Company's shareholders are Bahrain Mumtalakat Holding Company B.S.C. © (69.38%), SABIC Industrial Investment Company (SIIC) (20.62%) and General Public (10%).
In addition to molten metal, our diverse Value-Added Product (VAP) portfolio includes Foundry grade re-melt products (T-Ingots, Standard Ingots and Properzi Bars), Rolling Ingots (Slabs), Extrusion Ingots (Billets) and Unalloyed P1020 re-melt products. Around 79% of our products - from customised alloys to a variety of surface finishes -- are exported to more than 150 global customers through our sales offices in Europe, Asia, Singapore, and subsidiary office in the U.S.
Alba Campus comprises six Reduction Lines, three Power Stations, four Casthouses, four Carbon Plants along with other ancillary facilities. In addition to primary aluminium production, we also produce 530,000 mtpa of high-quality calcined petroleum coke at our own dedicated Coke Calcining Plant. Alba also yields 9.5 million cubic metres of potable water per annum from its dedicated seawater desalination plant.
Alba has carved an enviable reputation in Safety, Environment and Health, Sustainability and Quality Management. It is one of the few smelters in the world to have achieved Zero Lost Time Injuries (LTI) in 2019. Alba was recognized during 2020 with five categories of National Safety Council (NSC) awards - USA and Gold Medal Health and Safety Award from the Royal Society for the Prevention of Accidents (RoSPA) - UK. Alba was also awarded with the International Safety Award from British Safety Council (BSC) - UK in March 2021.
Alba brings value to its customers with the many globally recognised certifications such as ISO 9001, ISO 45001, ISO 14001 and ISO 27001. Moreover, the Company attained the significant Automotive Quality Management System - IATF 16949 in 2018 and, Bronze Medal by EcoVadis and Aluminium Stewardship Initiative (ASI) Performance Certification in 2020.
Alba is committed to fostering greater sustainability across all our operations. In line with its CSR initiatives, Alba set-up the Region's first-of-its-kind Spent Pot Lining (SPL) Treatment Plant in cooperation with Bahrain's Supreme Council for Environment in 2019 to create a sustainable solution for the treatment of SPL with zero-waste. In 2020, Alba inaugurated its Fish Farm Project in collaboration with the Bahrain National Guard Consumer Association, thus boosting the Kingdom's aquaculture and enriching the biodiversity around Alba's operations.
Starting out in 1971 as a 120,000 mtpa smelter, Alba has continually delivered value to its customers, shareholders, and stakeholders. As we mark the Golden Jubilee of operations in 2021, we aspire to be more productive, innovative, and sustainable. For more information on Alba, please visit 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 - an independently operated confidential reporting hotline in multiple languages - via a toll-free phone system or via the intranet 24 hours a day,
Alba's External Grievance Mechanism is in line with Performance Standards of the International Finance Corporation (IFC), a World Bank affiliated lending organisation.
Alba Response to COVID-19 Pandemic
2020 was a year like no other and as one of Bahrain's leading industrial companies, Alba's response strategy to COVID-19 was initiated since January 2020 and was based on the guidelines of Bahrain National Taskforce for Combating Coronavirus (COVID-19).
Alba's Executive team adapted an interactive approach from creating personal video messages, visiting shop-floor areas and engaging in virtual daily briefings with its Healthcare Centre team. Alba Management announced work-from-home and reduced working-hours where applicable especially for the female staff, and actioned plant-wide temperature checks for all shifts; social distancing protocols in offices, shop-floor areas and transport vehicles; frequent sanitization of all operational and non-operational areas; distribution of protective kits; installation of hand sanitizer dispensers across the Company and posted multilingual posters in various areas.
Despite COVID-19 outbreak, Alba continued to maintain stable operations thanks to its Business Continuity Plan and Emergency Preparedness Plan and sent-out few Letters of Assurance on Safe operations at Alba to all its stakeholders (customers, suppliers, and regulators) during 2020.
Alba, the Safety of our people - employees and contractors' workers - always comes First. Whilst we continue to follow COVID-19 measures at all times, we remain focused on Safety, Efficient Operations and Lean Cost Structure.
For further details, please contact:
Director, Investor Relations, Insurance & Corporate Secretary
Investor Relations Department
Tel: (973) 1783 5100
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