The newly listed Qatar Aluminium Manufacturing Company (Qamco), a 50% shareholder in Qatalum, has reported net profit of QR60.6mn, while the earnings per share (EPS) stood at QR 0.011 at the end of 10-month ended September 2019.
"This is a testament to the joint venture's relentless focus on efficient operations and competitive input costs, supported by close proximity within key strategic markets," a company spokesman said.
As a result of strong operational performance in the 10-month period, Qamco reported an EBITDA (earnings before interest, taxes, depreciation and amortisation) of QR543.1mn, despite challenging macro-economic conditions and a highly volatile environment for global aluminium prices.
As products and the raw materials used in the production process are highly correlated to the global aluminium prices, the bearish nature of the industry had an impact on Qamco’s share of earnings, he said, adding the cyclical nature of the industry, combined with a supply-demand imbalance, led to a drop in the realised selling prices.
Despite a sluggish operating environment, led by declining aluminium prices, the sales volume remained "stable" with a marginal increase, primarily benefiting from the company’s global marketing partnership which provides access to strategically important markets while competing with international players.
During the third quarter, the joint venture reported increased sales volumes although selling prices continued to decline, offsetting the impact of better raw material pricing and import costs.
“The broader macro-economic environment remains volatile but the company yet again demonstrated its ability to deliver continued performance. The management has been instrumental in rolling out a number of cost conservation measures in a bid to withstand the economic headwinds, whilst ensuring that the company remain well placed to maximise value for its shareholders," said Abdulrahman Ahmad al-Shaibi, chairman, Qamco.
Some of the specific initiatives include cost and supply chain optimisation, revenue enhancements, efficiency improvements and capital allocation. The adaptation to market forces will allow for more flexibility and better position the company for long-term future growth and maintain its market standing as one of the world’s lowest cost aluminium smelters.
Qamco’s share of total assets of Qatalum stood at QR7.8bn, with its share of cash and bank balances at QR280.3mn. Its share of net assets amounted to QR4.8bn at the end of September 30, 2019.
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