Aluminium Bahrain (Alba), one of the largest aluminium producers in the world, swung to a second-quarter loss as global prices for the metal were driven lower by ongoing trade tensions.
The company, majority owned by Bahrain sovereign wealth fund Mumtalakat, recorded a total comprehensive loss of 3.3 million Bahraini dinars (Dh32.2m) for the three months ending June 30, it said in a statement to Bahrain Bourse, where its shares trade. It posted a total comprehensive income of 29.1m dinars in the corresponding period of 2018.
Alba’s gross profit for the reporting period also slid to 15.4m dinars, more than halving from 34.4m dinars a year earlier. Total revenue of 245.1m dinars for the second quarter of this year, however, was slightly higher than the 244m dinars in the same period last year, it noted.
US-China trade tensions and other geopolitical events have taken their toll on investors and “added bearish dimension to the overall market sentiment”, Alba said in the bourse filing, adding that primary demand dropped in North America and Europe due to a cyclical slowdown in economic activity.
The stimulus measures adopted by the Chinese government, it said, had also "failed to create activity in key market-sectors such as auto and construction". Consumption in the Middle East and North African markets also fell on the back of weaker construction activity, it said.
Prices of aluminium on the London Metal Exchange (LME) dropped 21 per cent year-on-year to $1,793 per tonne in the second quarter of this year, the company said.
“The economic uncertainty and lower LME prices have taken its toll on the aluminium industry but in Alba, we have emerged stronger with progressing the ramp-up of Line 6,” Alba’s outgoing chief executive, Tim Murray, said. He is due to step down at the end of July after seven years in charge of the company.
The Line 6 expansion project of Alba will make it the world’s largest aluminium smelter, boosting Alba’s per-annum production by 540,000 metric tonnes to 1.5 million metric tonnes per year. Alba’s Line 6 Expansion Project is one of the biggest brownfield developments in the Middle East region, with a project cost of around $3 billion.
