Alba 2012 revenue plunges 54pc
Manama, February 13, 2013
Aluminium Bahrain, one of the largest aluminium smelters in the world, said its revenue for 2012 fell 54 per cent year-on-year to $257 million from $564 million the year before mainly due to a sharp drop in company sales driven by lower LME prices and higher energy costs.
Announcing the 2012 results, Alba registered a full-year sales of $1.97 billion, down 16 per cent from $2.34 billion a year ago on the back of low LME prices.
The Bahrain flaghip company boosted its production by 8,907 metric tonnes despite tough LME market conditions thus taking the 2012 production to a historic high of 890,217 MT compared to 881,310 mtpa achieved in 2011.
The sales of value-added products reached 65 per cent of total shipments in 2012 compared to 62 per cent in 2011, said a statement.
Commenting on the results, chief executive, Tim Murray said, "Despite tough LME market conditions, Alba’s resilient business model has enabled the company to achieve a healthy financial performance in 2012 thanks to the sustained focus on Operational Excellence and the support of our dedicated workforce."
"As the Aluminium industry outlook looks positive, Alba is well-positioned to embark on 2013 thanks to the milestones achieved in 2012 which will lay the foundations for a better overall performance," he noted.
In 2012, the actual cash delivered to the shareholders was $203 million compared to $267 million a year ago. The Board recommended an additional dividend of $52 million bringing the total dividend for 2012 to $105 million.
The Alba board has proposed dividend of $105 million (of which $52.6 million were paid as an interim dividend in August 2012), stated the Bahraini firm.
Alba said the aluminium demand was still healthy with world consumption up by 3.9 per cent year-on-year (YoY). The demand in North America continues to grow with 5.6 per cent YoY driven by automotive and construction sectors; Asian consumption propelled by China (8 per cent YoY) and India (6 per cent YoY).
The Mena demand grew by 5.5 per cent YoY while demand in Europe fell down by 4.8 per cent due to a decline in automotive production, it stated.
The aluminium giant pointed out that the world production was growing at 3.3 per cent and was further expected to rise with greenfield projects ramp-up in the Middle East, Russia and India.
However, the aluminium cash prices at the London Metals Exchange dropped by 16 per cent in 2012 with an average cash price of $2,019 MT versus $2,398MT in 2011
Chairman Mahmood Hashim Al Kooheji said Alba has turned in yet another record-breaking year, with production reaching 890,217 metric tonnes in 2012. "Amid the downtrend in LME prices, the company was still able to sustain its healthy performance - a testament on our ability to execute against strategy thanks to the leadership of our executive management team and the support showed by Alba’s workforce."
"Furthermore, distributing a cash dividend of $105 million for 2012 - 28 Fils per share - endorses the company’s strong business fundamentals which continuously deliver value to its shareholders.”
Alba top officials including Murray, acting chief finance & supply officer, Ali Al Baqali and investor relations manager, Eline Hilal will be holding a series of meetings with investors in Bahrain, London and New York City.
The company said it had achieved recurrent savings of $40 million in 2012 ahead of the $30 million target.
On the key 2012 highlights, Murray said the Pot Line 5 was upgraded from AP30 to AP36 technology allowing an increase of current to 360 kA. Also last year Bechtel Canada was selected to perform the Bankable Feasibility Study (BFS) for Line 6 expansion with Dubal DX+ technology as the base for BFS.
The key priorities this year include accelerating the AlbaSafeWay programme; leverage high physical premiums in 2013 new contracts as well as maintain a sustained focus on value-added products; complete the refinancing of $169 million local bond facility in March 2013 and finalise long-term contract to secure gas and power as well gear-up for Pot Line 6 expansion project.-TradeArabia News Service