Qatar Aluminium Manufacturing Company (QAMCO), a successful producer of primary aluminium and one of the largest aluminium smelters in the region, has reportedly announced its financial results for the fourth-month period ended on March 31, 2019. The company announced that its net profit was at QR13.3 million, with earnings per share of QR 0.02. This result predominantly represents the net profit share of QAMCO’s joint venture Qatalum.
There were two challenging conditions in the market that primarily affected Qatalum’s performance, said the company itself. The first challenging condition was the increase in the costs of raw materials; particularly the prices of alumina that led to a rise in Qatalum’s operating cost and a decrease in its operating margins substantially during December 2018.
The second challenging condition was the lower consumption of aluminium in some industries, resulting in a gradual decline in demand for the metal. Increase in aluminium supply in some major markets due to the United States’ sanctions on the Russian aluminium company UC Rusal caused a further challenge to Qatalum.
Nevertheless, the company reported having witnessed a gradual improvement in its operating costs from the beginning of 2019, due to lower raw materials costs and improved aluminium selling prices. Also, Qatalum, together with its strategic partner Hydro, sold all of its products with international suppliers, according to its financial results.
On the other hand, QAMCO has a strong asset position as of 31 March 2019, standing at QR 5.7 billion, with cash and bank balances amounted to QR 191.9 million.
In a bid to maximise value to shareholders, QAMCO is reportedly working closely with Qatalum in a number of areas of value improvements including cost and supply chain optimisation, revenue enhancement, efficiency improvement, and capital allocation. These efforts will expectedly ensure Qatalum to be able to continue to maintain its position as one of the world’s low cost aluminium smelter.
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