Manama, Bahrain— Aluminium Bahrain B.S.C. (Alba), the world’s largest aluminium smelter ex-China, has reported a drop of 68% in its profit for the first quarter of 2023 to $126.2 million, compared to $390.4 million for the same period in 2022.
The company’s total comprehensive income for Q1 2023 was $120.7 million, down by 71% YoY.
The company generated $984 million from contracts with customers in Q1 2023. Its top-line and bottom-line were affected by lower LME prices and premiums.
Alba’s total equity as of March 31, 2023 was $4.62 billion, a drop by 5% compared to BD1,822.5 million $4.84 billion as of December 31, 2022.
However, Alba’s Total Assets as of March 31, 2023, were BD2,680.9 million ($7,130 million), an increase of 2% compared to BD2,617.2 million ($6,961 million) as of December 31, 2022.
Alba’s top and bottom lines were driven by lower LME prices and premiums, due to a bearish post-COVID recovery in China, limited restarts of capacity in Europe (owing to falling gas prices) and banking turmoil’s impact on US economic activity, which continued to weigh on the aluminium market.
Economic activity in China has bounced back, but it did not yet translate into a recovery in aluminium consumption. The Middle East’s demand for aluminium fell by 6% YoY, with Bahrain’s consumption falling by 9% YoY, while UAE and KSA respectively fell by 6% YoY.
In terms of the global supply of aluminium, it remained flat, thanks to a fresh wave of cuts, with Chinese production up by 3% YoY owing to supply cuts on the back of insufficient hydropower.
Middle East supply fell by 1% YoY, whereas Europe had a lacklustre mood with the closure of 25% of its operating smelting capacity.
The production decreased by 7% YoY owing to limited restart of capacity in smelters. The world market was in surplus with China (+1 million MT) and without China (+0.05 million MT).
In terms of its Environment, Social, and Governance (ESG) highlights, Alba has been awarded a Solar Farm Project, and it has secured BBK’s sustainable financing loan of BD1.6 million ($4.2 million) for its Solar Farm Project.
It has also commissioned a Food Waste Composter and planted 12,000 trees since 2021. The company has also achieved 8 million safe working hours without LTI on 06 March 2023, and the procurement and foundation works for Main Equipment of Block 4 Project have been completed.