DOHA: Qatar Aluminium Manufacturing Company (Qamco), a 50 percent shareholder in Qatar Aluminium Limited (Qatalum), a successful joint venture that produces aluminium products and operates aluminium smelters in the region, recorded a net profit of QR60.6m for the ten-month period ended 30 September 2019. Qamco’s share of total assets in the JV stood at QR7.8bn.
Commenting on the financial and operational highlights, Abdulrahman Ahmad Al-Shaibi, Chairman of the Board of Directors, QAMCO, said: “The broader macro-economic environment remains volatile but the Company yet again demonstrated its ability to deliver continued performance. The management has been instrumental in rolling out a number of cost conservation measures in a bid to withstand the economic headwinds, whilst ensuring that the Company remain well placed to maximize value for its shareholders.
Some of the specific initiatives include cost and supply chain optimization, revenue enhancements, efficiency improvements and capital allocation. The adaptation to market forces will allow for more flexibility and better position the Company for long-term future growth and maintain its market standing as one of the world’s lowest cost aluminium smelters.” During the ten-month period, Qamco’s earnings per share (EPS) stood at QR0.011 (after the split of Qamco’s shares). This is a testament to the JV’s relentless focus on efficient operations and competitive input costs, supported by close proximity within key strategic markets.
As a result of strong operational performance in the 10-month period, Qamco reported an EBITDA of QR543.1m, despite challenging macro-economic conditions and a highly volatile environment for global aluminium prices, Qamco stated.
As products and the raw materials used in the production process are highly correlated to the global aluminium prices, the bearish nature of the aluminium industry had an impact on Qamco’s share of earnings. The cyclical nature of the aluminium industry, combined with a supply-demand imbalance, led to a drop in the realized selling prices.
Despite a sluggish operating environment, led by declining aluminium prices, the sales volume remained stable with a marginal increase, primarily benefiting from the Company’s global marketing partnership which provides access to strategically important markets while competing with international players. During the third quarter, the JV reported increased sales volumes although selling prices continued to decline, offsetting the impact of better raw material pricing and import costs.
Qamco’s share of total assets of Qatalum as at 30 September 2019 stood at QR7.8bn, with its share of cash and bank balances amounting to QR280.3m. Qamco’s share of net assets stood at QR4.8bn as at 30 September 2019.
QAMCO’s closing unrestricted cash and bank balance stood at QR79.0m after distribution of interim dividends to its shareholders amounting to QR111.6m (QR 0.02 per share) on 5 May 2019.
Qamco will host an IR Earnings call of its third quarter earnings with investors to discuss its results, business outlook and other matters on Wednesday, October 30, 2019 at 1.30pm.
