Alba posts a 48% decline in Q1 2024 profit amid higher sales volume, owing to sluggish LME prices

Aluminium Bahrain B.S.C. (Alba) has posted an uptick in its operational performance but a downfall in financial results for the first quarter (Q1) of 2024 ended March 31. The company’s profits and comprehensive income decreased year-on-year despite increased production and sales. 

Financial output

As Alba announced, its Q1 2024 profit stood at BD24.5 million (US$65 million), reflecting a 48 per cent year-on-year decrease from BD47.5 million (US$126.2 million). The company’s basic and diluted earnings per share were fils 17 during Q1 2024 versus fils 34 a year ago. 

Total comprehensive income for Q1 2024 amounted to BD27.7 million (US$73.6 million), down by 25.34 per cent from BD37.1 million (US$98.7 million) during Q1 2023. Gross Profit came in at BD57.3 million (US$152.3 million) during Q1 2024 – 28.29 per cent less than BD79.9 million (US$212.4 million) in Q1 2023. 

Alba generated BD334.6 million (US$889.9 million) of revenue from customer contracts in Q1 2024, compared to BD369.9 million (US$983.8 million) in Q1 2023. 

 Alba’s total assets at the end of Q1 2024 were BD2,575.5 million (US$6,849.6 million) versus BD2,553.6 million (US$6,791.4 million) a year ago – slightly up by 0.9 per cent. 

Alba’s fiscal output in Q1 2024 was primarily affected by bearish LME prices, down by 8 per cent Y-o-Y, and lower premiums, 27 per cent less than in Q1 2023. 

Operational highlights

Alba reported a sales volume of 363,283 tonnes for Q1 2024, which was up by 1 per cent Y-o-Y from 359,677 tonnes. Vale added sales (VAP) averaged 70 per cent of total shipments, corresponding to +10 per cent Y-o-Y. 

The company’s production also rose 2 per cent year-on-year from 398,252 tonnes to 405,893 tonnes.

Besides these, Alba achieved many more in its operations during Q1 2024, such as securing a 10-year gas supply deal with Bapco Energies and a technology service agreement with EGA for Reduction Line 6, which includes includes technical support services, monitoring services as well as operational consultation.

Insights into the global industry

Alba has highlighted the recovery of the global economy amid rising interest rates. According to Alba, the market demand for aluminium has grown 5 per cent year-on-year, and production is poised for a comeback. Currently, persistent energy price risks and volatile shipping costs are slowing progress overall. 

Alba also noted that China leads the demand growth fueled by a robust market in renewables and electric vehicle sectors, driving Q1 2024 consumption by 9 per cent Y-o-Y. 

The Middle East region also boasts a positive picture, with demand climbing 7 per cent Y-o-Y, driven by higher consumption in the UAE by 14 per cent and Saudi Arabia by 8 per cent Y-o-Y. 

Alba’s 2024 objectives

Alba is determined to improve its safety practices, embrace digital technologies to enhance operational efficiencies further and empower human capital by upskilling through targeted training programmes.

Commenting on the Company’s performance for the first quarter of 2024, the Chairman of Alba’s Board of Directors, Khalid Al Rumaihi stated: “Despite market headwinds and lower LME prices, our commitment to operational excellence yielded good results in Q1 2024. In fact, if commodity prices (LME and premium prices) had remained at Q1 2023 levels, we are confident we would have delivered an even stronger performance for this quarter. Such performance positions us as a frontrunner to capitalize on the upswing in LME prices driven by global aluminium demand boom. Furthermore, our focus to strategic priorities equips us to navigate 2024 with agility, capitalizing on emerging opportunities.”

Alba’s Chief Executive Officer, Ali Al Baqali, added: “While the overall economic climate remains challenging, we are laser-focused on the controllable aspects of our business: Safety, streamlined operations, and a rigorously cost-effective structure. This focus, coupled with the dedication of our entire team, empowers us to thrive even in these challenging economic conditions.”