REG - Aluminium Bahrain - 3rd Quarter Results

Aluminium Bahrain BSCAnnouncement

12/11/2024 13:15

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RNS Number : 9423L  Aluminium Bahrain B.S.C.  12 November 2024

Media Release - Tuesday 12 November 2024

 

Alba Reports its Financial Results for the Third Quarter and 9 Months of 2024

http://www.rns-pdf.londonstockexchange.com/rns/9423L_1-2024-11-12.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/9423L_1-2024-11-12.pdf)

Q3 & 9 Months 2024 Financial Performance

Aluminium Bahrain B.S.C. (Alba) (Ticker Code: ALBH), the world's largest
aluminium smelter on one site, has reported a Profit of BD54.5 million (US$145
million) for the third quarter of 2024, up by 215% Year-over-Year (YoY),
versus a Profit of BD17.3 million (US$46 million) for the same period in 2023.
The Company reported Basic and Diluted Earnings per Share of fils 39 for Q3
2024 versus Basic and Diluted Earnings per Share of fils 12 for the same
period in 2023. The Total Comprehensive Income for Q3 2024 stood at BD51
million (US$135.6 million) versus Total Comprehensive Income for the third
quarter of 2023 of BD20.8 million (US$55.2 million) - up by 145.7% YoY. Gross
Profit for Q3 2024 was BD83.4 million (US$221.8 million) versus BD48.6 million
(US$129.3 million) for the same period in 2023 - up by 71.6% YoY. With regards
to the Revenue from contracts with customers in Q3 2024, Alba generated
BD433.5 million (US$1,152.8 million) versus BD400 million (US$1,063.7 million)
in Q3 2023 - up by 8.4% YoY.

 

With regards to the nine months of 2024, Alba has reported a Profit of BD147.5
million (US$392.2 million), up by 55.8% YoY, versus a Profit of BD94.6 million
(US$251.7 million) for the same period in 2023. The Company reported Basic and
Diluted Earnings per Share of fils 104 for the nine months of 2024 versus
Basic and Diluted Earnings per Share of fils 67 for the same period in 2023.
Alba's Total Comprehensive Income for the nine months of 2024 was BD145.3
million (US$386.5 million), up by 60.7% YoY, compared to a Total Comprehensive
Income of BD90.5 million (US$240.6 million) in the same period of 2023. Gross
Profit for the nine months of 2024 was BD242.6 million (US$645.2 million)
versus BD196.4 million (US$522.3 million) in the same period of 2023 - up by
23.5% YoY. Alba generated in the nine months of 2024 Revenue from contracts
with customers of BD1,175 million (US$3,125 million) versus BD1,157 million
(US$3,077 million) in the same period of 2023 - up by 1.6% YoY.

 

Total Equity as of 30 September 2024 stood at BD1,885.7 million (US$5,015
million), up by 5.4%, versus BD1,789.2 million (US$4,758.6 million) as of 31
December 2023. Alba's Total Assets as of 30 September 2024 were BD2,659.6
million (US$7,073.5 million) versus BD2,553.6 million (US$6,791.4 million) as
of 31 December 2023 - up by 4.2%.

 

Alba's top-line and bottom-line were driven by LME prices which increased by
4% in the 9 Months of 2024 and 11% YoY in Q3 2024; however, lower premiums
down by 15% YoY in the 9 Months of 2024 compared to the previous year,
partially offset these gains while premiums inched higher by +2% YoY in Q3
2024 versus the same period in 2023.

 

Industry Highlights [Based on CRU Market Intelligence]

§ Slow Demand Recovery Amidst Macroeconomic Challenges (+1% YoY)

The global economy continues its gradual recovery, bolstered by positive
market sentiment following the US Federal Reserve's interest rate cut and
China's stimulus measures. However, geopolitical tensions and trade barriers
remain significant risks to the near-term outlook.

 

o  Middle East: Demand up by 5% year-over-year (YoY) supported by higher
consumption in KSA and Bahrain.

o  North America: Demand rose by 4% YoY, as the US economy settled into a
sustainable growth pace despite passive manufacturing and housing activity
while packaging segment is recovering.

o  China: Demand remained flat, with uneven economic recovery requiring
further government support.

o  Europe: The eurozone economy remains uncertain with uneven growth and weak
consumption leading to a 1% YoY contraction in aluminium consumption.

 

§ Global Aluminium Production rises 0.5% YoY

o  China: Production up by 1% YoY stabilising after Yunnan ramp-ups. China is
about to reach its production capacity cap of 45 million metric tonnes making
any significant net supply growth from China unlikely.

o  Europe: Supply increased by 2% YoY, driven by Germany and Russia.

o  North America: Production contracted by 2% YoY primarily due to a 12% YoY
decline in US.

o  Middle East: Supply remained almost flat.

o  Market Balance: The global market remained broadly balanced in Q3, with
inventories at low levels compared to historical norms. The world market is in
a slight deficit c.0.03 million MT with China and in surplus of c.0.1 million
MT w/o China.

 

§ LME Price & Premiums

o  LME price averaged US$2,383/t in Q3 2024, up by 11% YoY. LME Inventories
reached 790,000 MT in Q3 2024 up by 62% YoY. European premiums remain high due
to tight supply and disruptions while US Midwest premiums were down due to
limited spot activity and focus on 2025 negotiations.

Alba's Operational Highlights

o  Production: Q3: 402,568 MT (-2% YoY); 9 Months: 1,212,209 MT (-0.1% YoY).

o  Sales Volume: Q3: 431,220 MT (+0.2% YoY); 9 Months: 1,192,041 MT (+0.8%
YoY).

o  Value-Added Sales: Q3: 72% vs 68% in 3Q23; 9 Months: 72% versus 67% in 9
months of 2023.

o  Achieved savings for the e-Al Hassalah (the Company's cost improvement
programme) of US$51.24 million against 2024 Target of US$60 million.

Alba Strategic Updates

o  On 16 Sep'24, Alba announced a non-binding agreement with Ma'aden to
commence due diligence towards a potential business combination with segments
of Ma'aden aluminium strategic business unit.

o  Alba appointed advisors to guide its due diligence process as it explores
a potential business combination with Saudi Arabian Mining Company
(Ma'aden) - additional updates will be provided on an ongoing basis to ensure
compliance with the governing laws and regulation.

Aluminium Market Outlook: Uncertainties Cloud Short-Term Prospects [Based on
CRU Market Intelligence]

§ Market Uncertainty Persists: The market will remain uncertain while the US
Fed rate cuts and Chinese stimulus will provide short-term support, sustained
price increases will depend on fundamental improvements in demand.

§ Demand Outlook: Global demand is expected to remain lackluster in Q4, with
Europe presenting the most fragile demand scenario.

§ Economic Recovery Hope: Anticipated Fed rate cuts may stimulate consumer
spending from Q1 2025 onwards supporting aluminium demand.

§ Supply Conditions: Limited new smelting projects and China's production cap
will maintain constrained supply conditions in the near term.

§ Premiums Outlook: Premiums are likely to remain high due to strengthening
demand from 2025 and the implementation of the Carbon Border Adjustment
Mechanism.

§ LME Price Forecast: Aluminium prices are projected to trade within a narrow
range of US$2,400/t to US$2,500/t in the near term.

Alba Priorities: Safe, Sustainable, Successful

§ Leading the Way: Safety First, Sustainability Always

o  Aligned with Bahrain's objective of net-zero emissions by 2060, Alba
embeds sustainability principles in all operations, minimizing environmental
impact from raw material sourcing to product delivery.

§ Operational Excellence and Growth

o  Exceed 2023 Net Finished Production of 1,620,665 MT and achieve e-Al
Hassalah 2024 Target of US$60 million (versus 2026 Target of US$150 million).

§ Capacity Expansion and Efficiency Enhancement

o  Leverage its industry-leading certifications such as Aluminium Stewardship
Initiative (ASI), EcoVadis and Low-Carbon Aluminium EternAl(TM) to penetrate
new markets and drive growth in Value Added Sales (VAP).

o  Complete Block 4 Project and Solar Farm (+6 MW) by Q4 2024.

o  Advance the Class III Feasibility Study for the New Replacement Line which
will replace Reduction Lines 1-3.

§ Planned Merger: Alba x Ma'aden: Progress with the due diligence.

Commenting on the Company's performance for the nine months of 2024, the
Chairman of Alba's Board of Directors, Khalid Al Rumaihi stated: "Despite
navigating a complex global landscape, Alba has demonstrated its resilience
and ability to deliver strong financial results. Our focus on operational
efficiency, combined with strategic initiatives, has enabled us to achieve
higher top-line and bottom-line performance.

As we move towards the end of 2024, we remain focused on capitalising on
emerging opportunities and deliver sustainable value to our shareholders."

Alba's Chief Executive Officer, Ali Al Baqali, added: "At Alba, we believe
that safety and productivity are mutually inclusive. By prioritising both, we
have created a culture that has allowed us to consistently deliver strong
results.

Our commitment to safety has enabled us to achieve to-date more than 26
million safe working hours without LTI."

Alba Management will hold a conference call on Wednesday 13 November 2024 at
3:00 PM Bahrain Time to discuss the Company's financial and operational
performance for Q3 and 9 Months of 2024 and outline its strategic priorities
moving forward.

ENDS

 

 

 

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

[Ticker: ALBH]

A Global Aluminium Leader: At plus-1.62 million metric tonnes per annum (mtpa)
(2023), Alba is a world-leading aluminium smelter with a proud 50-year legacy
in operational excellence, safety, environmental responsibility, and community
development.

 

Trusted Partner: A cornerstone of the Bahrain's economy, Alba produces
high-quality aluminium, including standard and value-added products, which are
exported to over 270 customers globally. With sales' offices in Europe
(Zurich), Asia (Singapore), and a subsidiary in the U.S., Alba is a reliable
partner on the world stage. Alba is dually 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%). Alba prioritizes the highest quality standards,
reflected in its certifications: ISO 9001 (quality), ISO 14001 (environment),
ISO 27001 (information security), ISO 45001 (occupational health and safety),
and ISO 18788 (security operations management). Additionally, Alba
demonstrates its commitment to responsible manufacturing through
certifications like IATF 16949 (automotive quality), ISO 22301 (business
continuity), and ASI Performance and Chain of Custody Standards. This
dedication is further underscored by their top 1% Ecovadis Platinum rating for
sustainability.

 

Pioneering Sustainability: As the first aluminium smelter in the Middle East,
Alba is central to Bahrain's thriving downstream aluminium sector,
contributing significantly to the Kingdom's GDP. Committed to social
responsibility, Alba employs a workforce that is 86% Bahrainis (2023) and
invests heavily in employee training and development. Alba also plays a
crucial role in the Aluminium Downstream Park, therefore increasing the
contribution of non-oil sectors to the GDP of Bahrain. Alba has been
recognised for its initiatives to produce Aluminium responsibly through awards
such as Top ESG performer in Bahrain by ESG Invest, Safeguard Label from
Bureau Veritas and Best Corporate Governance Award by Ethical Boardroom.

 

Recognised for its environmental practices, social contributions, and
corporate governance, Alba launched a comprehensive ESG Roadmap in 2022
focusing on 6 priority areas: (1) Decarbonisation, (2) Green Energy &
Aluminium, (3) Circular Economy & Secondary Aluminium, (4) Employee
Welfare, (5) Collaboration & Partnership and (6) Transparency,
Communications & Due Diligence. Since its inception, Alba has invested
into numerous environment, sustainable and socio-economic development projects
that have had a positive impact on the society. Alba's first-of-its-kind
US$37.5 million zero-waste Spent Pot Lining Treatment Plant, the upcoming +6
MW Solar Farm Project and the Power Station 5 Block 4 Project are tangible
initiatives aligned with Bahrain's Net Zero Carbon Targets by 2060 led by HRH
the Crown Prince and Prime Minister of Bahrain.

 

In a significant step towards its ESG goals, particularly its commitment to a
circular economy and secondary aluminium, Alba introduced EternAl, its new
line of low-carbon aluminium products. Launched in May 2024, EternAl offers
two initial variants: EternAl-30 and EternAl-15, containing 30% and 15%
recycled content respectively.

 

Safety First, Always: Guided by the motto "Safety First, Safety Always," Alba
prioritises the well-being of its employees and contractors. The Company
achieved a record-breaking 30 million safe working hours without a lost-time
injury in September 2022. The Company has been recognised internationally for
its excellent Safety and Health track record with awards such as the RoSPA
President's Award for winning RoSPA Gold Medal Award 10 years in a row, the
British Safety Council's International Safety Award with Merit along with
4-Star Audit Rating, as well as numerous awards from the National Safety
Council (NSC).

 

Alba Power Station 5 (PS5) Block 4 Expansion Project

 

Alba's PS5 Block 4 is a new 680.9-megawatt (MW) combined-cycle power plant
that expands the existing PS5 facility. This state-of-the-art J-class gas
turbine addition boasts superior efficiency compared to Power Stations 3 &
4. Scheduled for completion in Q4 2024, Block 4 will boost PS5's total
capacity to 2,481 MW, while reducing greenhouse gas emissions by 0.5 tonnes of
CO(2) per tonne of aluminium produced.

A consortium of Mitsubishi Power and SEPCOIII is responsible for the entire
project lifecycle, from design and engineering to construction and
commissioning. Alba has achieved in April 2024 the first fire of the
state-of-the-art GT for Block 4 Project.

Alba Stakeholder Engagement Plan

Alba prioritises open communication with all its stakeholders, including the
community, environmental and social groups. Through its Stakeholder Engagement
Plan, the Company proactively addresses environmental and social impacts of
its operations, outlining clear mitigation controls. Alba also maintains an
external Grievance Mechanism accessible through the Code of Conduct, allowing
stakeholders and the public to voice concerns and raise issues.

Scan the above to Alba's Stakeholder Engagement Plan

Alba's External Grievance Mechanism

Alba prioritises ethical conduct and environmental responsibility.
Stakeholders, employees, contractors, and the community can confidentially
report any potential breaches of Alba's Code of Conduct or raise concerns
about environmental and social impacts through the Alba Integrity Line
(https://www.albasmelter.com/en/category/code-of-conduct) . This independent,
multilingual hotline operates 24/7 and is accessible via a toll-free phone
number, the company intranet, or the website at www.albasmelter.com
(https://www.albasmelter.com) .

Scan the above to Alba's Code of Conduct
 

For further details, please contact:

Eline Hilal

Director, Investor Relations, Insurance & Corporate Secretary

Tel:          (973) 1783 5100

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

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

 

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