Qatar Aluminium Manufacturing Company (Qamco) posted a net profit of QR5.2mn for the seven-month period that ended in June.
These results predominantly represent the share of net profit in Qamco’s joint venture, Qatalum.
Qatar Aluminium Manufacturing Company is a 50% shareholder in Qatalum, which is a successful producer of primary aluminium and one of the most efficient aluminium smelters in the region.
Earnings per share stood at QR0.001 (after the split of Qamco’s shares) during the period.
Qamco’s share of EBITDA in Qatalum for the period ended 30 June 2019 amounted to QR375.2mn.
In a statement on Thursday, Qamco said the aluminium industry is “cyclical in nature and highly influenced” by the recent trade restrictions imposed by some developed economies, impacting its supply and demand dynamics.
During the six-month period that ended in June this year, the “aluminium industry faced bearish economic sentiment”, which resulted in a drop in the realised selling prices by 10%, compared to the previous year, directly affecting the performance of the company.
Qatalum continued to gain from its strategic partner, Norsk Hydro, and maintained its position to market and sell all of its produced products and compete with international suppliers for the period.
Hence, Qatalum’s sales volumes increased by 2% for the six-month period from January to June this year, compared to the same period of 2018.
Nevertheless, from the beginning of 2019, Qatalum witnessed gradual improvement in operating costs due to lower raw material costs and fixed costs. Alumina prices, a primary raw material, did not drop as much as the finished products' selling prices.
During the second quarter, Qatalum has recognised a “one-off impairment loss” due to major overhaul of its steam turbines. Qamco’s share of the recognition amounted to QR13mn, which resulted in a corresponding share of power import costs that amounted to QR8mn, which primarily affected the profitability for the second quarter, apart from the continued decline in selling prices.
Qamco’s share of total assets in Qatalum as of June 30, 2019, stood at QR8bn, with share of cash and bank balances amounting to QR348.7mn.
Qamco’s share of net assets as of June 30 was QR4.7bn. Qamco’s closing net cash and bank balance amounts to QR78.8mn after distribution of interim dividends to its shareholders amounting to QR111.6mn on May 5, 2019.
With an objective of “maximising value” to its shareholders, Qamco said it is “working closely” with its joint venture, Qatalum, in a number of areas of value improvements.
This includes cost and supply chain optimisation, revenue enhancements, efficiency improvements and capital allocation. “These efforts ensure that Qatalum will continue to maintain its position as one of the world’s low cost aluminium smelters,” Qamco said.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
QICDRC holds its first fully remote hearing
Qatar’s continuous efforts to halt virus spreading laudable
Safety record silver lining amid dark clouds in the sky
Airlines continue to grapple with Covid-19 impact
Iran is pressing for IMF loan; some business to stay shut despite easing
China faces its worst job market in over 20 years
Australia’s ‘AAA’ credit rating comes under threat
Hong Kong unveils $17.7bn relief measures to save jobs
Bankers scramble to catch wave of Hong Kong take-private deals