Aluminium Bahrain (Alba), owner of one of the world’s largest aluminium smelters, reported a 70 per cent fall in third quarter net income on Wednesday that it blamed on a slump in prices.
Net income for the three months to September 30 was BD8.7 million ($23.07 million), down from BD29.5 million in the same period a year ago, Alba said in a statement.
The company posted a net income of BD75.7 million ($201 million) for the nine months of 2015 versus BD61.9 million ($164 million), up by 22 per cent year-on-year on the back of higher LME prices and physical premiums during the first six months of 2015.
Alba’s total sales for the third quarter were BD184.4 million ($490 million) versus BD223.2 million ($593 million) for the same period in 2014, a drop of 17 per cent year-on-year due to lower LME prices, the company said.
For the nine months of 2015, sales totalled BD590.3 million ($1.57 billion), a decrease of around 2 per cent compared to BD599.6 million ($1.60 billion) for the same period of 2014.
Commenting on Q3 results, Alba chairman Shaikh Daij bin Salman bin Daij Al Khalifa said: “In light of low LME prices, the company will continue to push the limit on its operational performance all the while by remaining cost competitive.”
Alba chief executive Tim Murray added: “Despite the collapse of all-in-aluminium prices, Alba has been able to maintain its strong intrinsic performance in a challenging market.”
The board recommended an interim cash dividend of 5.5 fils per share, which is BD7.77 million ($21 million) paid on September 1, 2015 to eligible shareholders.
Meanwhile, Reuters quoted Murray as saying that Alba will start the process for a potential bond sale in the first quarter of 2016.
In June, the state-backed company received government approval to raise its annual output by 514,000 tonnes to 1.45 million tones via a $3.5 billion plant expansion.
Sources had told Reuters Alba was considering various options to fund this expansion including loans, export credit agency finance and a capital markets transaction.
“I don’t think the (bond) offering will be in Q1 (2016) but in terms of getting the process going it will be in Q1,” said Murray in a conference call .
He said he thought there was ample market liquidity for Alba to issue a bond, but declined to say how much the company was looking to raise.
“In terms of the (timing of the) actual issuance I’ll leave that to JP Morgan as our advisors,” said Murray.
In August, Alba said it would seek a credit rating ahead of talks to fund its expansion, but Murray revealed the company had yet to approach ratings agencies. –TradeArabia News Service and Reuters