Aluminium Bahrain B.S.C. (Alba) (Ticker Code: ALBH), the world’s largest aluminium smelter on one site, has reported a Profit of BD54.5 million (US$145 million) for the third quarter of 2024, up by 215% Year-over-Year (YoY), versus a Profit of BD17.3 million (US$46 million) for the same period in 2023.

The Company reported Basic and Diluted Earnings per Share of fils 39 for Q3 2024 versus Basic and Diluted Earnings per Share of fils 12 for the same period in 2023. The Total Comprehensive Income for Q3 2024 stood at BD51 million (US$135.6 million) versus Total Comprehensive Income for the third quarter of 2023 of BD20.8 million (US$55.2 million) – up by 145.7% YoY. Gross Profit for Q3 2024 was BD83.4 million (US$221.8 million) versus BD48.6 million (US$129.3 million) for the same period in 2023 – up by 71.6% YoY. With regards to the Revenue from contracts with customers in Q3 2024, Alba generated BD433.5 million (US$1,152.8 million) versus BD400 million (US$1,063.7 million) in Q3 2023 - up by 8.4% YoY.

With regards to the nine months of 2024, Alba has reported a Profit of BD147.5 million (US$392.2 million), up by 55.8% YoY, versus a Profit of BD94.6 million (US$251.7 million) for the same period in 2023. The Company reported Basic and Diluted Earnings per Share of fils 104 for the nine months of 2024 versus Basic and Diluted Earnings per Share of fils 67 for the same period in 2023. Alba’s Total Comprehensive Income for the nine months of 2024 was BD145.3 million (US$386.5 million), up by 60.7% YoY, compared to a Total Comprehensive Income of BD90.5 million (US$240.6 million) in the same period of 2023. Gross Profit for the nine months of 2024 was BD242.6 million (US$645.2 million) versus BD196.4 million (US$522.3 million) in the same period of 2023 – up by 23.5% YoY. Alba generated in the nine months of 2024 Revenue from contracts with customers of BD1,175 million (US$3,125 million) versus BD1,157 million (US$3,077 million) in the same period of 2023 - up by 1.6% YoY.

Total Equity as of 30 September 2024 stood at BD1,885.7 million (US$5,015 million), up by 5.4%, versus BD1,789.2 million (US$4,758.6 million) as of 31 December 2023. Alba’s Total Assets as of 30 September 2024 were BD2,659.6 million (US$7,073.5 million) versus BD2,553.6 million (US$6,791.4 million) as of 31 December 2023 - up by 4.2%.

Alba’s top-line and bottom-line were driven by LME prices which increased by 4% in the 9 Months of 2024 and 11% YoY in Q3 2024; however, lower premiums down by 15% YoY in the 9 Months of 2024 compared to the previous year, partially offset these gains while premiums inched higher by +2% YoY in Q3 2024 versus the same period in 2023.

Industry Highlights [Based on CRU Market Intelligence]

  • Slow Demand Recovery Amidst Macroeconomic Challenges (+1% YoY)

The global economy continues its gradual recovery, bolstered by positive market sentiment following the US Federal Reserve's interest rate cut and China's stimulus measures. However, geopolitical tensions and trade barriers remain significant risks to the near-term outlook.

 

  • Middle East: Demand up by 5% year-over-year (YoY) supported by higher consumption in KSA and Bahrain.
  • North America: Demand rose by 4% YoY, as the US economy settled into a sustainable growth pace despite passive manufacturing and housing activity while packaging segment is recovering.
  • China: Demand remained flat, with uneven economic recovery requiring further government support.
  • Europe: The eurozone economy remains uncertain with uneven growth and weak consumption leading to a 1% YoY contraction in aluminium consumption.

 

  • Global Aluminium Production rises 0.5% YoY
  • China: Production up by 1% YoY stabilising after Yunnan ramp-ups. China is about to reach its production capacity cap of 45 million metric tonnes making any significant net supply growth from China unlikely.
  • Europe: Supply increased by 2% YoY, driven by Germany and Russia.
  • North America: Production contracted by 2% YoY primarily due to a 12% YoY decline in US.
  • Middle East: Supply remained almost flat.
  • Market Balance: The global market remained broadly balanced in Q3, with inventories at low levels compared to historical norms. The world market is in a slight deficit c.0.03 million MT with China and in surplus of c.0.1 million MT w/o China.

 

  • LME Price & Premiums
  • LME price averaged US$2,383/t in Q3 2024, up by 11% YoY. LME Inventories reached 790,000 MT in Q3 2024 up by 62% YoY. European premiums remain high due to tight supply and disruptions while US Midwest premiums were down due to limited spot activity and focus on 2025 negotiations.

Alba’s Operational Highlights

  • Production: Q3: 402,568 MT (-2% YoY); 9 Months: 1,212,209 MT (-0.1% YoY).
  • Sales Volume: Q3: 431,220 MT (+0.2% YoY); 9 Months: 1,192,041 MT (+0.8% YoY).
  • Value-Added Sales: Q3: 72% vs 68% in 3Q23; 9 Months: 72% versus 67% in 9 months of 2023.
  • Achieved savings for the e-Al Hassalah (the Company’s cost improvement programme) of US$51.24 million against 2024 Target of US$60 million.

Alba Strategic Updates

  • On 16 Sep’24, Alba announced a non-binding agreement with Ma’aden to commence due diligence towards a potential business combination with segments of Ma’aden aluminium strategic business unit.
  • Alba appointed advisors to guide its due diligence process as it explores a potential business combination with Saudi Arabian Mining Company (Ma’aden) - additional updates will be provided on an ongoing basis to ensure compliance with the governing laws and regulation.

Aluminium Market Outlook: Uncertainties Cloud Short-Term Prospects [Based on CRU Market Intelligence]

  • Market Uncertainty Persists: The market will remain uncertain while the US Fed rate cuts and Chinese stimulus will provide short-term support, sustained price increases will depend on fundamental improvements in demand.
  • Demand Outlook: Global demand is expected to remain lackluster in Q4, with Europe presenting the most fragile demand scenario.
  • Economic Recovery Hope: Anticipated Fed rate cuts may stimulate consumer spending from Q1 2025 onwards supporting aluminium demand.
  • Supply Conditions: Limited new smelting projects and China's production cap will maintain constrained supply conditions in the near term.
  • Premiums Outlook: Premiums are likely to remain high due to strengthening demand from 2025 and the implementation of the Carbon Border Adjustment Mechanism.
  • LME Price Forecast: Aluminium prices are projected to trade within a narrow range of US$2,400/t to US$2,500/t in the near term.

Alba Priorities: Safe, Sustainable, Successful

  • Leading the Way: Safety First, Sustainability Always
    • Aligned with Bahrain's objective of net-zero emissions by 2060, Alba embeds sustainability principles in all operations, minimizing environmental impact from raw material sourcing to product delivery.
  • Operational Excellence and Growth
    • Exceed 2023 Net Finished Production of 1,620,665 MT and achieve e-Al Hassalah 2024 Target of US$60 million (versus 2026 Target of US$150 million).
  • Capacity Expansion and Efficiency Enhancement
    • Leverage its industry-leading certifications such as Aluminium Stewardship Initiative (ASI), EcoVadis and Low-Carbon Aluminium EternAlTM to penetrate new markets and drive growth in Value Added Sales (VAP).
    • Complete Block 4 Project and Solar Farm (+6 MW) by Q4 2024.
    • Advance the Class III Feasibility Study for the New Replacement Line which will replace Reduction Lines 1-3.
  • Planned Merger: Alba x Ma’aden: Progress with the due diligence.

Commenting on the Company’s performance for the nine months of 2024, the Chairman of Alba’s Board of Directors, Khalid Al Rumaihi stated: “Despite navigating a complex global landscape, Alba has demonstrated its resilience and ability to deliver strong financial results. Our focus on operational efficiency, combined with strategic initiatives, has enabled us to achieve higher top-line and bottom-line performance.

As we move towards the end of 2024, we remain focused on capitalising on emerging opportunities and deliver sustainable value to our shareholders.”

Alba’s Chief Executive Officer, Ali Al Baqali, added: “At Alba, we believe that safety and productivity are mutually inclusive. By prioritising both, we have created a culture that has allowed us to consistently deliver strong results.

Our commitment to safety has enabled us to achieve to-date more than 26 million safe working hours without LTI.”

Alba Management will hold a conference call on Wednesday 13 November 2024 at 3:00 PM Bahrain Time to discuss the Company's financial and operational performance for Q3 and 9 Months of 2024 and outline its strategic priorities moving forward.

About Aluminium Bahrain B.S.C. (Alba)
A Global Aluminium Leader: At plus-1.62 million metric tonnes per annum (mtpa) (2023), Alba is a world-leading aluminium smelter with a proud 50-year legacy in operational excellence, safety, environmental responsibility, and community development.

Trusted Partner: A cornerstone of the Bahrain’s economy, Alba produces high-quality aluminium, including standard and value-added products, which are exported to over 270 customers globally. With sales’ offices in Europe (Zurich), Asia (Singapore), and a subsidiary in the U.S., Alba is a reliable partner on the world stage. Alba is dually listed on Bahrain Bourse and London Stock Exchange and its shareholders are Bahrain Mumtalakat Holding Company B.S.C. © (69.38%), SABIC Industrial Investments Company (SIIC) (20.62%) and General Public (10%). Alba prioritizes the highest quality standards, reflected in its certifications: ISO 9001 (quality), ISO 14001 (environment), ISO 27001 (information security), ISO 45001 (occupational health and safety), and ISO 18788 (security operations management). Additionally, Alba demonstrates its commitment to responsible manufacturing through certifications like IATF 16949 (automotive quality), ISO 22301 (business continuity), and ASI Performance and Chain of Custody Standards. This dedication is further underscored by their top 1% Ecovadis Platinum rating for sustainability.

Pioneering Sustainability: As the first aluminium smelter in the Middle East, Alba is central to Bahrain's thriving downstream aluminium sector, contributing significantly to the Kingdom's GDP. Committed to social responsibility, Alba employs a workforce that is 86% Bahrainis (2023) and invests heavily in employee training and development. Alba also plays a crucial role in the Aluminium Downstream Park, therefore increasing the contribution of non-oil sectors to the GDP of Bahrain. Alba has been recognised for its initiatives to produce Aluminium responsibly through awards such as Top ESG performer in Bahrain by ESG Invest, Safeguard Label from Bureau Veritas and Best Corporate Governance Award by Ethical Boardroom.

Recognised for its environmental practices, social contributions, and corporate governance, Alba launched a comprehensive ESG Roadmap in 2022 focusing on 6 priority areas: (1) Decarbonisation, (2) Green Energy & Aluminium, (3) Circular Economy & Secondary Aluminium, (4) Employee Welfare, (5) Collaboration & Partnership and (6) Transparency, Communications & Due Diligence. Since its inception, Alba has invested into numerous environment, sustainable and socio-economic development projects that have had a positive impact on the society. Alba’s first-of-its-kind US$37.5 million zero-waste Spent Pot Lining Treatment Plant, the upcoming +6 MW Solar Farm Project and the Power Station 5 Block 4 Project are tangible initiatives aligned with Bahrain’s Net Zero Carbon Targets by 2060 led by HRH the Crown Prince and Prime Minister of Bahrain.

 

In a significant step towards its ESG goals, particularly its commitment to a circular economy and secondary aluminium, Alba introduced EternAl, its new line of low-carbon aluminium products. Launched in May 2024, EternAl offers two initial variants: EternAl-30 and EternAl-15, containing 30% and 15% recycled content respectively.

Safety First, Always: Guided by the motto "Safety First, Safety Always," Alba prioritises the well-being of its employees and contractors. The Company achieved a record-breaking 30 million safe working hours without a lost-time injury in September 2022. The Company has been recognised internationally for its excellent Safety and Health track record with awards such as the RoSPA President’s Award for winning RoSPA Gold Medal Award 10 years in a row, the British Safety Council’s International Safety Award with Merit along with 4-Star Audit Rating, as well as numerous awards from the National Safety Council (NSC).

Alba Power Station 5 (PS5) Block 4 Expansion Project

Alba's PS5 Block 4 is a new 680.9-megawatt (MW) combined-cycle power plant that expands the existing PS5 facility. This state-of-the-art J-class gas turbine addition boasts superior efficiency compared to Power Stations 3 & 4. Scheduled for completion in Q4 2024, Block 4 will boost PS5's total capacity to 2,481 MW, while reducing greenhouse gas emissions by 0.5 tonnes of CO2 per tonne of aluminium produced.

A consortium of Mitsubishi Power and SEPCOIII is responsible for the entire project lifecycle, from design and engineering to construction and commissioning. Alba has achieved in April 2024 the first fire of the state-of-the-art GT for Block 4 Project.

Alba Stakeholder Engagement Plan

Alba prioritises open communication with all its stakeholders, including the community, environmental and social groups. Through its Stakeholder Engagement Plan, the Company proactively addresses environmental and social impacts of its operations, outlining clear mitigation controls. Alba also maintains an external Grievance Mechanism accessible through the Code of Conduct, allowing stakeholders and the public to voice concerns and raise issues.

Alba’s External Grievance Mechanism

Alba prioritises ethical conduct and environmental responsibility. Stakeholders, employees, contractors, and the community can confidentially report any potential breaches of Alba's Code of Conduct or raise concerns about environmental and social impacts through the Alba Integrity Line. This independent, multilingual hotline operates 24/7 and is accessible via a toll-free phone number, the company intranet, or the website at www.albasmelter.com.