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Aluminium Bahrain (ALBH)

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Wednesday 10 February, 2021

Aluminium Bahrain

Annual Financial Report

RNS Number : 6653O
Aluminium Bahrain B.S.C.
10 February 2021
 

Media Release - Wednesday 10 February 2021


http://www.rns-pdf.londonstockexchange.com/rns/6653O_1-2021-2-10.pdf
 

Alba Discloses its Financial Results for the Fourth Quarter and Full-Year of 2020

 

Q4 2020 and Full-Year 2020 Financial Performance

Aluminium Bahrain B.S.C. (Alba) (Ticker Code: ALBH), the world's largest aluminium smelter w/o China, has reported a Profit of BD32 million (US$85.1 million) for the fourth quarter of 2020, up by 132% Year-over-Year (YoY) versus a Profit of BD13.8 million (US$36.7 million) for the same period in 2019. The Company reported Basic and Diluted Earnings per Share of fils 23 for Q4 2020 versus Basic and Diluted Earnings per Share of fils 10 for the same period in 2019. The Total Comprehensive Income for Q4 2020 stood at BD32.9 million (US$87.7 million) versus Total Comprehensive Income for the fourth quarter of 2019 of BD13.8 million (US$36.7 million) - up by 138% YoY. Gross Profit for the fourth quarter of 2020 was BD60.1 million (US$159.9 million) versus BD44.8 million (US$119.1 million) in Q4 2019 - up by 34% YoY.

For the Full-Year of 2020, Alba has reported a Profit of BD9.7 million (US$25.9 million), up by 81% YoY, versus a Profit of BD5.4 million (US$14.3 million) for 2019. Alba reported Basic and Diluted Earnings per Share of fils 7 versus Basic and Diluted Earnings per Share of fils 4 in 2019. Alba's Total Comprehensive Income for the Full-Year of 2020 was BD1.4million (US$3.9 million), down by 73% YoY, compared to a Total Comprehensive Income of BD5.4 million (US$14.3 million) for 2019. Gross Profit for 2020 was BD141 million (US$375 million) versus BD90.2 million (US$239.9 million) in 2019 - up by 56% YoY. 

With regards to the Revenue from Contracts with Customers in Q4 2020, Alba generated BD278.8 million (US$741.5 million) versus BD293.7 million (US$781 million) in Q4 2019 - down by 5% YoY. For the Full-Year of 2020, Revenue from Contracts with Customers reached BD1,061.4 million (US$2,822.9million), up by 3% YoY, compared to BD1,029.4 million (US$2,737.8 million) for 2019.

Total Equity as at 31 December 2020 stood at BD1,079.5million (US$2,871.1 million), up by 0.09% YoY, versus BD1,078.6 million (US$2,868.5 million) as at 31 December 2019. Alba's Total Assets as at 31 December 2020 were BD2,353.7 million(US$6,259.8 million) versus BD2,408.2 million (US$6,404.8 million) as at 31 December 2019 - down by 2%.

Alba's top-line was impacted in the fourth quarter of 2020 by lower metal Sales' volume and partially offset by higher LME price [up by 9% Year-over-Year (US$1,918/t in Q4 2020 versus US$1,754/t in Q4 2019)] while the bottom-line was driven by higher LME prices and partially impacted by higher depreciation, financial charges and foreign exchange losses.

 

Alba's top-line was driven in 2020 by higher metal Sales' volume (14% YoY) and partially offset by lower LME price [down by 5% Year-over-Year (US$1,702/t in 2020 versus US$1,792/t in 2019)] while the bottom-line was driven by higher top-line and partially impacted by higher depreciation, financial charges and foreign exchange losses.

 

2020 Industry Highlights - Supply/Demand in Focus

The global COVID-19 pandemic has forced short to medium-term challenges for all countries around the world while lockdowns casted potholes for major markets' recovery. The political and economic response to COVID-19 has raised further emphasis on ESG issues and given voice for stimulus packages to be green.

§ The ripple effects from COVID-19 outbreak along with the subsequent control measures have seen the world market demand easing to 62.2 million metric tonnes (MT) - down by 4% Year-over-Year (YoY).

§ COVID-19 outbreak continues to take its toll on Aluminium demand in major markets. A double-digit drop in consumption -- 14% YoY in North America and Middle East, 13% YoY in World ex-China, and 12% YoY in Europe.

§ China closed 2020 with a modest improvement as its economy resumed its activity to pre-COVID-19 capacity utilization [a 4% YoY increase in demand].

§ China: a net importer of aluminium for 1st time since 2009 owing to government stimulus packages which helped to reduce metal surplus outside China.

§ Manufacturing activity in US continues at a steady pace with North America supply up by 5% YoY.

§ Thanks to Alba's Line 6 Expansion Project, production in Middle East surged by 3% YoY amidst 2% supply cuts in UAE.

§ 2020 left the Aluminium value-chain with a structural surplus: World market in surplus with China (+2.6 million MT) and without China (+3.4 million MT).

§ LME inventories at ~1.3 million MT by end-2020 (versus ~1.4 million MT in 2019). LME-Cash averaged US$1,702/t in 2020 - down by 5% YoY

 

Alba Safety Highlights Amidst COVID-19

§ Strong emphasis on 'Safety First, Safety Always' with the launch of Safety Voice virtual campaign on 2 Nov'20.

§ Alba closed 2020 with 6 million safe working-hours despite the unfortunate LTI on 3 Aug'20.

§ Working diligently with the National Taskforce for combatting COVID-19 to ensure our People's Safety.

§ Giving back beyond Alba via various focused-initiatives in the local community (sanitization, face masks distribution, etc.) to lessen COVID-19 impact.

§ Enabling remote work from home for soft departments (men and women).

§ Alba ranked FIRST for second year in a row on Environmental, Social and Governance (ESG) amongst companies in Bahrain by ESG Invest.

 

2020: Alba Major Operational Highlights

§ People-Focused: rolling-out 'Al Jisr' Programme -- a new Training and Development initiative to build supervisory skills for national workforce on 01 Nov'20.

§ Alba inked MoU with Hangzhou Jinjiang Group Co. Ltd (HJJ) to explore future upstream development opportunities.

§ Strong operational performance: Sales' volume up by 14% YoY to 1,540,983 metric tonnes (MT), Production up by 13% YoY to 1,548,500 MT while VAP Sales averaged 44%.

§ Growing presence in Asia with establishing a Branch in Singapore.

§ Successful completion of Port Upgrade project.

§ Spent Pot Lining (SPL) Plant: overall progress exceeded 60% as of 31 Dec'20.

§ Line 6 Expansion Project: a recipient of the much-coveted GCC Industrial Project of the Year in the 2020 edition of the MEED Projects Awards.

§ Project Titan - Phase IV achieved savings of US$145 million, higher by US$45 million versus a target of US$100 million.

 

2021 Alba Priorities

§ Evolve Towards Safety Excellence & Keep Alba's Intrinsic Assets (Employees & Contractors) Safe Amidst Novel COVID-19.

§ Lead by Example & Support the Government's Initiative by Taking COVID-19 Vaccine.

§ Roll-out AL HASSALAH Savings' Initiative with the Aim to Achieve US$100 million by 2022.

§ Screen Potential Upstream Opportunities to Secure 1/3 Alumina requirements & Continuous Dialogue with Hangzhou Jinjiang Group Co. Ltd (HJJ).

§ Capitalise on Aluminium Stewardship Initiative (ASI) and Ecovadis Certifications to Penetrate New Markets & New Market Segments.

§ Complete Spent Pot Lining Treatment Plant as per Timeline.

§ Focus on Green and Sustainable Initiatives.

§ Launch 2021 New Vision, Mission & Values [Vision: to be the number one aluminium supplier for the generations to come. Mission: being a responsible corporate citizen, we want to create value for all stakeholders and society. Values: Safe & Green, Together, Ethics, Excellence, Resilience).

Commenting on Alba's financial performance for the full year of 2020, the Chairman of Alba's Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa stated:

"2020 was a year like no other but despite the challenging market sentiment, Alba closed this year stronger and on many fronts:

-  Our operations were running at full capacity while maintaining the Safety of our workforce: employees and contractors' personnel.

-  Our operational performance was the highest ever achieved: 1,548,500 metric tonnes and beating our own target of 1,540,000 metric tonnes.

-  Our resilient operations coupled with our agility yielded a sound financial performance with our Profit soaring to BD9.7 million (US$25.9 million) - up by 81% YoY.

-  In Q4 2020 alone, our Profit topped BD32 million (US$85.1 million) - this unparalleled financial performance was behind our strong finish in 2020."

Adding further, Alba's Chief Executive Officer, Ali Al Baqali said:

"As I complete my first year as a full-time CEO, I am proud to say that our biggest achievement in 2020 was keeping our People safe - this is our number one priority.

Despite all odds, we have forged ahead in 2020 and kept our cost lean by exceeding Project Titan - Phase IV Savings' Target [of US$100 million] by achieving additional US$45 million savings - this was only made possible thanks to our nimble workforce.

As we progress into 2021, we remain committed to Emerge Stronger as we advance towards Safety Excellence, capitalise on the lessons learnt in the pandemic year to meet AL HASSALAH objectives as well as have a Forward-Focus in respect to our ESG initiatives."

Alba Management will hold a conference call on Monday 15 February 2021 to discuss Alba's financial and operational performance for 2020 as well as outline the Company's priorities for 2021.

ENDS

Photo Caption

Shaikh Daij bin Salman bin Daij Al Khalifa, Alba's Chairman of the Board of Directors

Ali Al Baqali, Alba's Chief Executive Officer

 

About Aluminium Bahrain B.S.C. (Alba)

[Ticker: ALBH]

 

Alba is the world's largest aluminium smelter ex-China with a production of more than 1.548 million metric tonnes per annum (mtpa) (2020). With a dual listing on Bahrain Bourse and London Stock Exchange, the Company's shareholders are Bahrain Mumtalakat Holding Company B.S.C. © (69.38%), SABIC Industrial Investment Company (SIIC) (20.62%) and General Public (10%).

 

In addition to molten metal, our diverse Value-Added Product (VAP) portfolio includes Foundry grade re-melt products (T-Ingots, Standard Ingots and Properzi Bars), Rolling Ingots (Slabs), Extrusion Ingots (Billets) and Unalloyed P1020 re-melt products. Around 79% of our products - from customised alloys to a variety of surface finishes -- are exported to more than 150 global customers through our sales offices in Europe, Asia, Singapore, and subsidiary office in the U.S.

 

Alba Campus comprises six Reduction Lines, three Power Stations, four Casthouses, four Carbon Plants along with other ancillary facilities. In addition to primary aluminium production, we also produce 530,000 mtpa of high-quality calcined petroleum coke at our own dedicated Coke Calcining Plant. Alba also yields 9.5 million cubic metres of potable water per annum from its dedicated seawater desalination plant.

 

Alba has carved an enviable reputation in Safety, Environment and Health, Sustainability and Quality Management. It is one of the few smelters in the world to have achieved Zero Lost Time Injuries (LTI) in 2019. Alba was recognized during 2020 with five categories of National Safety Council (NSC) awards - USA, International Safety Award with Merit from British Safety Council (BSC) - UK, and Gold Medal Health and Safety Award from the Royal Society for the Prevention of Accidents (RoSPA) - UK. In addition, Alba closed 2020 with achieving 6 million safe-working hours without LTI.

 

Alba brings value to its customers with the many globally-recognised certifications such as ISO 9001, ISO 45001, ISO 14001 and ISO 27001. Moreover, the Company attained the significant Automotive Quality Management System - IATF 16949 in 2018 and, Bronze Medal by EcoVadis and Aluminium Stewardship Initiative (ASI) Performance Certification in 2020.

Alba is committed to fostering greater sustainability across all our operations. In line with its CSR initiatives, Alba set-up the Region's first-of-its-kind Spent Pot Lining (SPL) Treatment Plant in cooperation with Bahrain's Supreme Council for Environment in 2019 to create a sustainable solution for the treatment of SPL with zero-waste. In 2020, Alba inaugurated its Fish Farm Project in collaboration with the Bahrain National Guard Consumer Association, thus boosting the Kingdom's aquaculture and enriching the biodiversity around Alba's operations.

Starting out in 1971 as a 120,000 mtpa smelter, Alba has continually delivered value to its customers, shareholders, and stakeholders. As we mark the Golden Jubilee of operations in 2021, we aspire to be more productive, innovative, and sustainable. For more information on Alba, please visit www.albasmelter.com

Alba External Grievance Mechanism  

Alba's External Grievance Mechanism receives and facilitates the resolution of any 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,

Alba's External Grievance Mechanism is in line with Performance Standards of the International Finance Corporation (IFC), a World Bank affiliated lending organisation.

 

Alba Response to COVID-19 Pandemic

2020 was a year like no other and as one of Bahrain's leading industrial companies, Alba's response strategy to COVID-19 was initiated since January 2020 and was based on the guidelines of Bahrain National Taskforce for Combating Coronavirus (COVID-19).

Alba's Executive team adapted an interactive approach from creating personal video messages, visiting shop-floor areas and engaging in virtual daily briefings with its Healthcare Centre team. Alba Management announced work-from-home and reduced working-hours where applicable especially for the female staff, and actioned plant-wide temperature checks for all shifts; social distancing protocols in offices, shop-floor areas and transport vehicles; frequent sanitization of all operational and non-operational areas; distribution of protective kits; installation of hand sanitizer dispensers across the Company and posted multilingual posters in various areas.

Despite COVID-19 outbreak, Alba continued to maintain stable operations thanks to its Business Continuity Plan and Emergency Preparedness Plan and sent-out few Letters of Assurance on Safe operations at Alba to all its stakeholders (customers, suppliers, and regulators) during 2020.

Alba, the Safety of our people - employees and contractors' workers - always comes First. Whilst we continue to follow COVID-19 measures at all times, we remain focused on Safety, Efficient Operations and Lean Cost Structure.

 

For further details, please contact:

Eline Hilal

Director, Investor Relations, Insurance & Corporate Secretary

Investor Relations Department

Tel:   (973) 1783 5100

E-mail:   [email protected]

Website: www.albasmelter.com

 

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