Monday, Jul 30, 2012
(This story was originally published Sunday.)
DUBAI (Zawya Dow Jones)--Aluminium Bahrain (ALBH.BH), or Alba, posted a sharp drop in second quarter net profit on Sunday due to lower London Metal Exchange levels and higher gas costs, but said demand is still healthy despite global economic uncertainty.
Net profit in the three months ended June 30. amounted to $95 million. It made $185 million in the year earlier period, according to Zawya.com data.
Alba said western markets were forced to undergo further capacity cuts during the second quarter due to current LME prices and high-energy costs.
"Without LME & Gas impact, Alba was able to maintain its intrinsic value," said Chief Executive Laurent Schmitt in an emailed statement. "The company has successfully managed its working capital and was able to spin its value-added sales back to record levels--67% as of 2Q 2012 despite the downbeat sentiment of the global market as well as the downward trend of aluminium prices."
Even given the sharp drop in earnings, Alba said demand for aluminium remains healthy, underpinned by the automotive and construction sectors in North America, while the Japanese rebuild and Chinese government spending are fueling Asian demand.
Alba, one of the largest aluminum smelters in the world, was established in 1968, and is majority owned by Bahrain's sovereign wealth fund, Mumtalakat Holding Co., with Saudi petrochemical giant Saudi Basic Industries Corp., better known as Sabic, also holding a stake.
Last week Alba named BNP Paribas as an advisor to help it assess financing options related to the estimated $2.5 billion expansion of the company's smelter.
Alba shares closed trading Sunday 0.9% lower at BHD0.53.
-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
30-07-12 0404GMT
