ALUMINIUM Bahrain (Alba)’s sales and net profit plunged in 2012 amidst lower London Metal Exchange (LME) prices and higher energy costs but the company remained upbeat pointing to several positive factors it experienced during the year.

Sales were $1,978 million, a decline of 16 per cent versus $2,349 million in the previous year. Net income was $257 million against $564 million, a drop of 54 per cent YoY. In 2012, the actual cash delivered to shareholders was $203 million against $267 million. The board recommended an additional dividend of $52 million bringing the total dividend to $105 million.

2012 was also the year when Alba achieved its highest-ever production and commenced its Bankable Feasibility Study for the Line 6 expansion. During the year aluminium cash prices at the London Metal Exchange dropped 16 per cent with an average cash price of $2,019 per tonne versus $2,398 in 2011.

However, during 2012, Alba achieved recurrent savings of $40 million ahead of the $30 million target. It increased production by 8,907 tonnes despte tough LME market conditions and sales of value-added products reached 65 per cent of total shipments versus 62 per cent in 2011. Potline 5 was upgraded from AP30 to AP36 technology allowing an increae of current to 360 kA. Bechtel Canada was selected to perform the Bankable Feasibility Study for the Line 6 expansion with Dubal DX+ tehnology as the base for the study.

The company insisted it would  leverage high physical premiums in 2013 new contracts as well as maintain a sustained focus on value-added products. It would complete the refinancing of the $169 million local bond facility in March 2013 and finalise  a long-term contract to secure gas and power as well as gear up for the Potline 6 expansion. It would also accelerate its AlbaSafeWay programme, a safety improvement plan being implemented in coordination with the health, safety and environment department and leading global consultancy DuPont Sustainable Solutions.

Commenting on the results, Alba’s 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.”

Aluminium demand is still healthy with world consumption up 3.9 per cent YoY. Demand in North America continues to grow 5.6 per cent YoY driven by the automotive and construction sectors. Asian consumption is propelled by China (8 per cent YoY) and India (6 per cent YoY). Mena demand is up 5.5 per cent YoY while demand in Europe is down 4.8 per cent due to a decline in automotive production.

World production is growing at 3.3 per cent and is expected to rise with greenfield projects ramping up in the Middle East, Russia and India.

AL KOOHEJI REMARKS
The chairman of Alba’s board of directors, Mahmood Hashim Al Kooheji, commented: “Alba turned in yet another record-breaking year, with production reaching 890,217 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.”

The company announced that Murray, acting chief finance and 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. They will be making a presentation on the full year and Q4 results, discuss Alba’s performance for 2012 as well as outline the company’s priorities and plans for 2013.