Qatar Aluminium Manufacturing Company (Qamco), a 50 percent shareholder in Qatalum, which is a successful producer of primary aluminium and one of the most efficient aluminium smelters in the region, reported a net profit of QR5.2m for the seven-month period ended June 30, 2019.
The financial results predominantly represent the share of net profit in Qamco’s joint venture, Qatalum. Qamco’s share of EBITDA in Qatalum for the period ended June 30, 2019 amounted to QR 375.2m. The earnings per share stood at QR0.001, after the split of QAMCO’s shares.
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 ended June 30, 2019, the aluminium industry faced bearish economic sentiment which resulted in a drop in the realised selling prices by 10 percent compared to the previous year, directly affecting the performance of the company.
Qatalum continued to gain from its strategic partner, Norsk Hydro ASA, 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 percent for the six-month period from January to June 2019, 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 QR13m, which resulted in a corresponding share of power import costs that amounted to QR8m, 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 QR348.7m.
QAMCO’s share of net assets as of June 30, 2019 stood at QR4.7bn. QAMCO’s closing net cash and bank balance amounted to QR78.8m after distribution of interim dividends to its share-holders amounting to QR111.6m on May 5, 2019.
