Alba reports net loss of US$ 47 million in Q4 on higher alumina prices

Aluminium Bahrain B.S.C. (Alba) released its Full-Year and Fourth Quarter of 2018 results on Thursday February 07, 2019.The company reported a net loss of BD 17.5 million (US$ 47 million) in Q4 2018, down by 175% from a net Income of BD 23.4 million (US$ 62.4 million) in Q4 2017. Alba reported a gross loss of BD 7.4 million (US$ 20 million) versus a gross profit of BD 37.3 million (US$ 99.2 million) in Q4 2017, down by 120% YoY.

Total Sales/Revenues stood at BD 211.5 million (US$ 562.6 million) in Q4 2018, down 16% YoY, compared to BD 252.7 million (US$ 672.2 million) in Q4 2017.

Alba’s top-line and bottom-line in Q4 were impacted primarily by lower sales’ revenue and higher alumina prices.

In 2018, net income stood at BD 59.8 million (US$ 158.9 million), down by 35% YoY, compared to BD 92.5 million (US$ 245.9 million) in 2017. The company reported a gross profit of BD 85.9 million (US$ 228.6 million), a decrease of 36% YoY. Total Sales/Revenues reached BD 911.3 million (US$ 2.4 billion), up by 6% YoY, compared to BD 857.8 million (US$ 2.3 billion) in 2017. 

The company’s top-line and bottom-line were attributable to higher sales volume, higher LME price (+7% Year-over-Year (YoY)) and partially offset by higher alumina prices (+34% YoY).

Alba’s Total Assets as at December 31, 2018 reached BD 2,208.7 million (US$ 5,874.2 million), versus BD 1,686.1 million (US$ 4,484.5 million) as at 31 December 2017, up by 31% YoY.

In 2018, the company significantly improved its Safety performance by recording a 50% drop in Lost Time Injuries YoY. In addition, Alba launched ‘Think Orange, Think Line 6 Safe Start-up’ Campaign to coincide with the commissioning of Line 6. Value-Added Sales were at 60% in 2018 (up from 57% in 2017).

The Line 6 Expansion Project milestones include Alba Power Expansion Project achieves First Fire Milestone, Alba commissions Line 6 ahead of schedule, Alba starts Casthouse 4 - the biggest furnace in its history, Line 6 Smelter [overall progress > 80%], Power Expansion Project [PS 5 & PDS overall progress: 83% & 96%].

The Chairman of Alba’s Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa said:“Despite the significant volatility in the financial markets, Alba had a strong finish in both Safety and Production where Alba exceeded the 1-million metric tonnes production mark for the 1st time in its history. In addition, our flagship Line 6 project was commissioned ahead of schedule on 13 December 2018”.

Alba’s Chief Executive Officer said: “2018 was a challenging year with the unprecedented spike in Alumina prices which significantly impacted our bottom-line. Despite the impact of higher Alumina prices, Alba was able to deliver solid results on the back of our Project Titan Cost Improvement Program.

In 2019, we will continue our focus to improve Safety, Production and Cost along with our commitment to the Safe start-up of Line 6.”

 2018 Industry Highlights:

• World Consumption at ~66 million metric tonnes (mt) and up by 3% Year-over-Year (YoY). MENA demand rose by double digit (+13% YoY) backed by major infrastructure spending in Saudi Arabia (+28% YoY). Asian demand rose by 4% YoY led by slow consumption in China (+4% YoY). Europe consumption up by 3% YoY supported by sound demand in the construction and automobile sectors while demand in North America rose by 2% YoY mainly driven by the auto and aerospace sectors.
• Global Production Almost Flat at 1% YoY (~64 million mt), thus leading the World Market into a deficit with China (-1.8 million MT) and in deficit w/o China (-2.2 million MT). Higher alumina and power prices drove Chinese smelters’ closure translating into flat production growth, while Production in North America was down by 4% YoY due to production cut in ABI smelter in Canada.