Alba's Q2 net income declines 45.4%; Board proposes not to offer cash or share dividend

<p>Aluminium Bahrain (Alba), one of the largest aluminium smelters in the world, reported a 45.4 per cent decline in net profit in the second quarter of the current fiscal on Sunday. Alba's net income for the three months ended June 30 was BD 16.28 million ($43.2 million) compared to BD 29.8 million profit in the corresponding period previous year.<br /><br />Alba in its statement did not cite any reason for the decline, but the global downturn in aluminium prices which had led to the company's weak earnings in the last three quarters can be held responsible for the decline in net income.</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/alba25.7.16.jpg" alt="News" width="400" height="260" /><br /><br />Aluminium price in London Metal Exchange made a nose-dive to touch $1,450 per tonne in November last year after peaking at around $2,000 in May. Since then, the recovery in the light metal price has been pretty moderate; At the end of last week it was hovering around $1,611 per tonne.<br /><br />Alba Board has proposed not to offer a cash or share dividend for the period. This is in contrast with BD 0.0055 per share dividend in the same period last year. The company had also cut its full-year dividend for 2015. Alba chief executive Tim Murray was reported saying in February that the reduced profit sharing would help improve liquidity required for the company&rsquo;s Line 6 expansion project.<br /><br />Alba in its statement said that it now aims to boost its annual output by 540,000 tonnes to 1.5 million tonnes by adding the sixth potline, thereby becoming 'the world's largest single aluminium smelter complex.'<br /><br />The new facility is expected to go on stream in early 2019. Alba is raising funds totalling $3 billion approximately to help finance the project, through xport credit agencies, an international bond or sukuk issue, and a mixture of bank loans. The company is said to have approached banks for a loan amount of $750 million to finance its Line 6 expansion project, said sources close to the company.</p>