|30 April, 2019

Alba discloses its financial results for the Q1 2019

Company reported a Net Loss of $42million

Alba Q1 2019 Board Meeting.

Alba Q1 2019 Board Meeting.

For the first quarter of 2019, Alba’s top-line and bottom-line were primarily impacted by lower LME price, down by 14% Year-over-Year (US$ 1,859/t in Q1 2019 versus US$ 2,159/t in Q1 2018) and historically higher Alumina prices respectively [21% of LME price in Q1 2019 versus 18% of LME price in Q1 2018].

The Company reported a Net Loss of BD 15.8 million (US$ 42 million) compared to a Net Profit of BD 33.9 million (US$ 90 million) for the first quarter of 2018, down by 147% YoY. The Company posted a Gross Profit of BD 0.850 million (US$ 2.3 million) versus a Gross Profit of BD 40 million (US$ 106.3 million) for the first quarter of 2018, down by 98% YoY. With regards to Total Sales/Revenues, Alba generated BD 203.5 million (US$ 541.3 million) in Q1 2019 versus BD 221.3 million (US$ 588.5 million) in Q1 2018, a drop of 8% YoY. In Q1 2019, The Company reported a Loss per Share of fils 11 versus Earning per Share of fils 24 in Q1 2018.

Alba’s Total Assets as at March 31, 2019 stood at BD 2,259.9 million (US$ 6,010.3 million) versus BD 2,208.7 million (US$ 5,874.3 million) as at 31 December 2018, up by 2% YoY. Total Shareholders’ Equity as at March 31, 2019 stood at BD 1,057.8 million (US$ 2,813.3 million), down by 1% YoY, versus BD 1,073.5 million (US$ 2,855 million) as at December 31, 2018. 

Q1 2019 Industry Highlights

  • World Consumption almost flat (~1% YoY). MENA demand up by 8% YoY mainly driven by major infrastructure spending in KSA (+20% YoY). Economic headwinds in Europe tighten metal demand (+2% YoY) while North America demand rose by 1% YoY supported by auto production. As for China, the slowdown in construction and weak auto demand weighed on its consumption (flat growth).
  • Global Production - Modest Growth at +1.5% YoY. Chinese new capacity ramp-up gains momentum with 2% YoY while the 10% tariff on aluminium imports was behind the progressive smelters’ restarts in North America (+7% YoY). The World market is in surplus with China (+278 Kt) and in deficit w/o China (-571 Kt).
  • LME inventories at ~1.1 million MT as of March-end (down by 14% YoY). LME-Cash averaged US$1,859/t (down by 14% YoY) and the Physical premium prices are under pressure.

Q1 2019 Alba Highlights

  • Continuous improvement in Plant Safety with the launch of ‘Safety Gateway’ Campaign
  • The achieved benefits of Titan – Phase IV are US$ 9 million
  • Sales volume up by 2% YoY (257,113 mt) and production up by 5% YoY (272,707 mt)
  • Alba Value-Added Sales averaged 52% of total shipments in Q1
  • Line 6 Expansion Project Milestones:
    • Line 6 Smelter: 50% of Line 6 capacity in full operation (212 pots out of 424 pots) by 18 April 2019
    • Line 6 Smelter’s Overall Progress advanced by > 88%
    • Power Expansion Project [PS5 > 89% & PDS > 97%]

2019 Alba Priorities

  • Continued focus on Safety ‘Launch of Safety Gateway Campaign’
  • Deliver on Project Titan - Phase IV [US$ 40 million by end of 2019]
  • Focus on Value-Added Sales
  • Develop upstream opportunities on Alumina
  • Complete Line 6 ramp-up safely in early Q3 2019

In addition, the Board of Directors approved the Executive Management changes as part of its ongoing succession plan: Mr. Tim Murray, the current Alba CEO, will step-down on 31st July 2019 to relocate to the United States and Mr. Ali Al Baqali, the current Deputy CEO, will be appointed as acting CEO effective 01st August 2019. As part of this transition, Mr. Murray will continue with the Company as an advisor to the Alba’s Board Chairman. 

Commenting on the changes, the Chairman of Alba’s Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa said:

“I would like to thank Tim for his many years of service in Alba. Over the past 7 years as Alba’s CEO, Tim transformed the Company’s Safety culture.  He also played an instrumental role in the success of Line 6 Expansion Project which started ahead of schedule in December 2018. We wish Tim all the best as he returns to his family.

I also take the opportunity to congratulate Ali Al Baqali on his planned appointment to acting CEO of Alba. Ali brings many years of leadership from within the Company and I look forward to a smooth transition.”

Commenting on Alba’s financial performance in Q1 2019, Alba’s Chief Executive Officer Tim Murray stated:

“Despite the bearish market sentiment and lower LME prices, Alba continues to outperform its industry peers.

We are also targeting to complete the ramp-up of Line 6 in the 3rd quarter of 2019 which will provide a significant boost to our bottom-line.”

Alba Management will be holding the quarterly conference call on Thursday May 2, 2019 to present and discuss Alba's financial performance for the first quarter of 2019 as well as outline the Company's priorities for the remainder of the year.

-Ends-

About Alba

Aluminium Bahrain B.S.C. (Alba), one of the 1 million-metric tonnes smelters in the world, is one of the largest aluminium producers in the world. Alba is listed on both the Bahrain Bourse and London Stock Exchange, and the Company’s shareholders are Bahrain Mumtalakat Holding Company (69.38%), SABIC Industrial Investment Company (20.62%) and the General Public (10%).

Starting-out as a 120,000 metric tonne per annum (mtpa) smelter in 1971, Alba’s production for 2018 stood at plus-1 million metric tonnes. Alba’s product portfolio comprises high-grade aluminium and Value-Added Products that include standard and T-ingots, extrusion billets, rolling slabs, properzi ingots and molten aluminium. The Company is well-known for its strong Safety culture, employee development and work culture for value-creation and sustainable operations.

About Line 6 Expansion Project 

The pride of the Kingdom of Bahrain, the Line 6 Expansion Project will make Alba the world’s largest aluminium smelter.

With the First Hot Metal from Potline 6 achieved on 13 December 2018, Alba is now amongst the 1 million-metric tonne smelters in the world. Upon completion in 2019, the Line 6 Expansion Project will boost Alba’s per-annum production by 540,000 metric tonnes, bringing Alba’s total production capacity to 1.5 million metric tonnes per year.

Alba’s Line 6 Expansion Project is one of the biggest brownfield developments in the Middle East Region. With a CAPEX of approximately US$ 3 billion, the Line 6 Expansion Project involves the construction of a sixth pot line using EGA’s proprietary DX+ Ultra Technology, a 1,792 MW Power Station (Power Station 5) utilising the world’s first H-class General Electric (GE) 9HA Gas Turbine (GT) and other industrial services.

Bechtel is the EPCM contractor for the Line 6 Expansion Project smelter. For Power Station 5 (PS 5), GE and GAMA Consortium was awarded the EPC contract, while Siemens is the Power Distribution System contractor.  J.P. Morgan, Gulf International Bank (GIB) and National Bank of Bahrain (NBB) are the Financial Advisors for this Project. In June 2015, Alba Board approved the Line 6 Expansion Project and in November 2015, Alba secured the natural gas supply for this Project.

Alba successfully closed a US$ 1.5 Billion syndicated term-loan facility comprising two tranches Conventional Facility & and Islamic Facility in October 2016. The 1st tranche of the Export Credit Agencies (ECA) Financing of c. US$ 700 million for Euler Hermes and SERV-covered facilities was closed in July 2017 while the first part of 2nd ECA-tranche of EUR 204.5 million for Bpifrance Assurance Export (“BpiAE”) and Euler Hermes-covered facilities was secured in April 2018.  Alba successfully closed the final instalment of the 2nd ECA-tranche - c.US$136 million and c. EUR90 million from ECA supported-facilities - by end of 2018.

As of 31 March 2019, Line 6 Smelter’s Overall Progress advanced by 88.3% (Engineering progressed by 99.4% while Contracts and Procurement advanced by 98.9%); Power Station 5 & Power Distribution System Overall Progress exceeded 89% and by over 97% respectively.

Line 6 Expansion Project will be transformational for the Kingdom of Bahrain as it will significantly boost employment opportunities for Bahrainis at both Alba and the local downstream market. It will also present many co-investment opportunities through local and foreign aluminium investments in the Kingdom of Bahrain. 

Alba External Grievance Mechanism

Alba, in line with the Performance Standards of the International Finance Corporation (IFC), a World Bank affiliated lending organisation, has launched its External Grievance Mechanism to receive and facilitate the resolution of the affected communities’ concerns and grievances about Alba’s Environment and Social (E&S) performance.

External grievances about Alba’s E&S performance can be logged via the Alba Integrity Line - an independently operated confidential reporting hotline in multiple languages - via a toll-free phone system or via the intranet 24 hours a day, every day.

For further details, please contact:
Eline Hilal
Senior Manager, Investor Relations & Corporate Secretary
Investor Relations Department
Tel:         (973) 1783 5100
E-mail:   eline.hilal@alba.com.bh
Website: www.albasmelter.com  

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