Qatar Aluminium Manufacturing Company (Qamco), a 50 percent joint venture partner in Qatalum, which is a successful smelter that produces premium high quality primary aluminum products in Qatar and one of the most efficient aluminium smelters in the world, reported a net profit of QR14.6m for the six months period ended June 30, 2020.
The financial performance of Qamco during the first half of the year has continued to be impacted by external macroeconomic factors beyond the company’s control, which weighed on the company’s financial performance since 2019. During the period, Qamco’s earnings per share (EPS) stood at QR0.003. Qamco’s share of revenue for the financial period amounted to QR1.121bn, down by 9 percent, compared to the first half of 2019, as the global pandemic impacted major industries across the automotive, transport jets and construction sectors.
Sales volume during the first six months of 2020 increased by 7 percent, compared to the same period last year, as Qamco’s JV swiftly shifted the production to standard ingots, whereas, the demand for premium aluminum products and alloys used by various industries declined. QAMCO’s share of joint venture’s EBITDA stood at QR306m for the first six months of 2020, down by 10 percent, compared to the same period last year, but the EBITDA margins remained resilient in the current turbulent market conditions and stood at 27.3 percent as compared to 27.9 percent of H1-2019.
Qamco’s average selling prices during H1-2020 fell by 15 percent, compared to H1-2019, which is largely driven by the decline in global market prices for aluminum. Qamco’s share of debt in the JV declined by 8 percent to reach QR2.218bn as at June 30, 2020, compared to the balance as at December 31, 2019, on account of principal repayment during the period.
Qamco’s JV concluded refinancing of its outstanding loan amounting to $1.3bn during the first quarter of 2020. The refinancing deal will boost free cash flows to the JV, and provide new avenues of flexibility to endure market volatilities. Commenting on the company’s financial and operational highlights, Abdulrahman Ahmad Al Shaibi, Chairman of the Board of Directors at Qamco, said: “Despite the macroeconomic headwinds since the start of 2020, the company continued to demonstrate its underlying strengths being one of the world’s lowest-cost and most-efficient aluminium smelters.
During the period, with an adverse market sentiments, Qamco’s JV managed to remain profitable with continued declining trends in the global aluminium prices and unprecedented challenges faced amid spread of COVID-19 pandemic”. He added: “In response to limit the spread of COVID-19 pandemic, our joint venture continued with the measures implemented to ensure safety of employees and business continuity. As the pandemic evolved, our sales and marketing partner, diligently monitored the market position, and acted effectively to minimise the risk of disruptions to the supply chain.
With these measures in place, there were no disruptions noted in the production processes nor to the distribution and marketing activities due to the COVID-19 pandemic, where our teams continued to outperform the market adversities. Going forward, adaptation will be a key to ever-evolving market dynamics which will bring in increased flexibility and would better position the company for the long-term and maintain its market standing as one of the world’s lowest cost aluminium smelters”.
SOURCE: THEPENINSULAQATAR