Qamco reports net profit of QR 95 million for 2020

The Qatari Public Shareholding Company, Qatar Aluminium Manufacturing Company (Qamco) has reported a net profit of QR 95 million.

The aluminium company has proposed a dividend distribution of QR195.3mn, representing a payout ratio of 206% of 2020’s net earnings, equivalent to 3.5% cash dividend or QR0.035 per share.

In 2020, Qamco’s revenue amounted to QR2.2 billion. Sales volumes were marginally higher than in 2019, as its joint venture swiftly shifted the production to standard ingots (SI), as the demand for value-added products and alloys used by various industries declined during the peak of pandemic due to lockdowns and lack of industrial activity.

The steering of production volumes rapidly from VAP to SI supported in securing the maximum sales volumes. However, plunge in VAP volumes resulted in lower realised LME premiums.

On the other hand, given the demand for VAP showed signs of recovery, especially towards the end of Q3-20, QAMCO’s JV successfully shifted the product mix back to VAP from SI in Q4-20, resulting in higher premiums and better margins for the quarter.

During the year, profitability remained under pressure mainly on account of lowered revenues from declining selling prices, which declined by 12% year-on-year basis and contributed QR289 million negatively to the net profits for the year ended 31^st December’20, as compared to the previous year. This was partially offset by the sales volumes, which positively contributed QR 10 million to net profits for the financial year 2020, as compared to last year.

The overall cost of goods sold remained lower on declining raw material prices, energy costs and cost optimisation initiatives helped to realise savings in staff costs, plant maintenance and technical services costs.

On an overall basis, the decline in cost of goods sold contributed QR255 million positively to the net profits in 2020.

Commenting on the financial and operational highlights, Mr Abdulrahman Ahmad Al-Shaibi, Chairman of the Board of Directors, QAMCO, said: “Despite momentous macroeconomic headwinds since the outbreak of COVID-19 pandemic, QAMCO continued to rely on its solid strategic foundations of cost efficiency, operational excellence and flexibility, with a firm commitment to HSE and managed to maintain same levels of production and sales, in a market where some of the global aluminium players continued to depict sluggish trends due to disruptive environment apart from stymied demand and declining prices of aluminium.”

“The potential threats of COVID-19 pandemic on joint venture’s operations and business continuity were successfully contained by proactive measures concerning supply chain activities and safety. Our sales and marketing partner worked diligently and acted decisively to achieve sales volumes as last year, while our resilience remained in our flexibility towards the product mix.”

Going forward, banking on the efficient operational excellence in all key business areas will successfully safeguard against market volatilities, while ensuring our flexible approach towards our supply chain and marketing capabilities, to better position us for our long-term goals.”